Oroville council adopts 2026–27 budget with $2.5 million shortfall; council asks staff for five-year forecast

The Oroville City Council unanimously adopted the city—udget for fiscal year 2026 nd'7, approving a package staff described as carrying a projected $2.5 million deficit.

Finance staff Ruth (speaker 21) told the council the budget before them was the "same budget that you heard two weeks ago" and reiterated that the shortfall stems from declining revenues, including sales-tax receipts and the loss of a grant. "It is still $2,500,000 deficit," Ruth said, adding that the city—ontinues to see expenditures rise while revenues fall. She said the city remained "well under" its legal appropriations limit, with available capacity at about 65 percent.

The nut of the discussion centered on how the city will close the gap. Vice Mayor Smith (speaker 6) and others emphasized that prior conservative budgeting left the city with reserves to manage a downturn but urged a prompt planning process. "We put back significant amounts of dollars because rainy days are not an if, it's a when," Vice Mayor Smith said, describing the current shortfall as a "rainy year" the council had prepared for.

Chair (speaker 1) offered a council-contributed analysis of potential fire-department contract savings and told members he had prepared a 65-page review outlining options that, if implemented, could reduce costs. "There is a potential savings to the current budget of about $1,300,000 a year," the Chair said; he described the paper as informational and asked staff to validate the figures.

City staff said they will deliver a consultant-prepared five-year financial forecast to the council in the coming weeks and begin drafting strategies to address the deficit once the forecast is complete. Staff also noted a CalPERS projection that contribution rates may fall, improving the city ctuarial position over time.

Council members framed the vote as an approval of the presented plan rather than final agreement on cuts; they unanimously approved the budget and directed staff to return with the forecast and proposed strategies for closing the gap.

What happens next: staff will deliver the five-year forecast, refine revenue and expenditure projections, and return to council with concrete strategy options and timelines for any recommended service or staffing changes.