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Though it’s larger than usual, Crescent City’s finance director advised councilors not to spend the nearly $693,000 it currently has in unallocated reserve.

Crescent City is working on a lot of projects. One is repairing Pebble Beach Drive between 7th and 8th streets, Linda Leaver said during her mid-year budget report on Monday. The city’s hoping to be reimbursed through Caltrans’ emergency opening process, but that’s still up in the air.

Even if it is reimbursed, the city will still need to pony up the money for the repairs, which could lead to cash flow issues that $693,000 could help with, Leaver said.

“If we do get reimbursed, that could potentially be used for a different project in the future,” she told councilors.

However, in her staff report, Leaver says the emergency repair will likely cost more than the unallocated reserve. She advised councilors to transfer $31,000 for the initial barricades and design work in response to the slide that first occurred on Jan. 14 to the city’s streets department.

Other notable issues Leaver brought to the Council’s attention include an overall decrease by about $300,000, or 3 percent of the total budget for wages and benefits, due to “multiple different vacancies in lots of different departments.”

Revenues are expected to increase in its sewer and water funds. Leaver  said the sewer fund has working capital of about $2.8 million, while the water fund has working capital of about $1.8 million. However, she noted that there’s a long list of capital improvement projects for the water and sewer systems the city has to get through and a rate study is planned for both funds.

Finally, Crescent City has earmarked the bulk of the $1.6 million it received in American Rescue Plan Act dollars toward repairs at the Fred Endert Municipal Pool and the reconstruction of Front Street.

The pool projects include upgrades to its HVAC and dehumidification systems as well as its flooring and were being paid with $670,158 in ARPA dollars and $516,233 in Measure S tax revenue.

The $3.8 million budget for the Front Street project was cobbled together from a variety of funding sources, including $767,534 from the general fund, ARPA and Measure S dollars.

Noting that ARPA dollars must be obligated by Dec. 31 and stating that the pool projects won’t start until next fiscal year, Leaver recommended transferring the ARPA allocation for the pool to the Front Street project.

She suggested using general fund allocation for the Front Street project to pay for the pool instead.

“Front Street is well underway and the pool project is slightly delayed, and the ARPA money needs to be spent by December,” Leaver said. “Initially the Council allocated general fund money back in 2022 or 2023 toward Front Street. We would like to shift that money to the pool project and take the ARPA money from the pool project and put it on Front Street so we can get the ARPA funds spent before the deadline.”

As of March 5, Leaver said she was projecting an ending fund balance in the general fund of about $3.75 million. This includes a potential 5 percent budget-to-actual savings on operational expenses.

On June 30, 2023, Crescent City had a balance in its Measure S sales tax revenue fund of $1.14 million. The balance at the end of the current fiscal year is expected to be $544,957, which will be set aside for future Measure S activities, according to Leaver’s staff report.

As for revenue to the general fund, Crescent City is expected to receive an increase of about $115,000 in sales tax this current fiscal year. Transient occupancy tax is also expected to increase. According to Leaver’s staff report, since the first two quarters came in higher than budgeted, she recommended an increase of $153,000.

Interest revenue has also come in higher than expected. As a result, staff recommends an increase of $53,000 in interest revenue, according to Leaver’s staff report.

In the water fund, Leaver said staff was requesting an increase of about $270,000 to its working capital to replace the city’s water meters with automated water meters. The city was budgeting about $100,000 per year to purchase and install the meters and public works staff has installed all the meters the city has acquired so far.

“We’d like to make a large purchase so we can keep them going,” Leaver said. “This was in the five-year plan for the water fund, so it’s not a new project. It’s just speeding up. We would like to keep them going.”

Though the Crescent City Council hasn’t made a decision on whether it will increase sewer rates, city resident and former councilwoman Donna Westfall said not addressing the issue of expanding the wastewater treatment plant is placing an unfair burden on ratepayers.

Following Leaver’s report, Crescent City Mayor Blake Inscore asked staff to highlight the number of capital improvement projects in both the water and sewer funds that the city has struggled to find funding and staffing for.

According to Inscore, it’s been a decade since Crescent City has raised its sewer rates.

“I’d like to challenge the public and ask what else in the economy has not gone up in 10 years?” Inscore asked. “If we’re going to talk about this we need to show a plan of work [of what] needs to be done and that’s part of the reason [we’re] addressing where our rate structures are.”

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