COLUSA, CA (MPG) – The Colusa City Council will dip into special funds to cover a projected $495,552 General Fund shortfall under the city’s 2026-27 budget.
The council adopted the spending plan Sept. 1 without deciding which accounts would be tapped or how much would be taken from each. Cannabis revenue, fire strike team reimbursements and other money set aside by the city were discussed as possible sources, with those decisions to return at a later date.
The shortfall had been reduced from approximately $570,000 presented during an earlier budget review, primarily through cuts to services and supplies. Councilmember Greg Ponciano said finding additional savings would require the city to consider far more difficult options.
“Unfortunately, to substantially change that number, it comes down to people,” Ponciano said. “And so those are going to be tough decisions that no company wants to have to make. But it’s a discussion that we’re going to have to have sooner or later.”
The Police Department represents the largest share of General Fund spending at about $2.08 million, followed by the Fire Department at $1.26 million and the Street Department at approximately $890,000. Together, police, fire and streets account for about two-thirds of the city’s approximately $6.45 million in General Fund expenditures. The city also budgeted nearly $327,000 for parks.
Questions about the new budget were compounded by uncertainty over the city’s final financial position for 2025-26. Preliminary figures showed a $295,503 deficit, but outstanding revenue and expenses had not yet been recorded.
“With what I’ve seen so far, it will be better,” Finance Director Ishrat Khan said.
Measure B sales tax revenue is included in the new budget only through its current expiration in April 2027. If voters extend the tax, the additional revenue would reduce the projected shortfall. If they reject it, Councilmember Daniel Vaca said reductions would be unavoidable.
“If Measure B doesn’t pass, we as a council have to sit down with staff and figure out where we’re making our cuts, period,” Vaca said.
During public comment, Don Bransford said the city’s financial problem extends beyond whether Measure B continues because ongoing expenditures are exceeding available revenue. He urged the council to identify the source of the imbalance and begin making corrections sooner rather than later.
“Even if this Measure B passes, you’re spending more money than you’re taking in,” Bransford said. “And you’ve got to pinpoint where that is.”
Bransford also urged the city to use available reserves to eliminate any remaining shortfall from the previous year rather than carrying it forward. He pointed to unpaid garbage bills and delinquent property taxes as indications that residents are struggling with rising costs while the city faces increases in health care, insurance, utilities, fuel and equipment maintenance.
Council members shared concerns about declining year-end fund balances and the city’s reliance on transfers from other accounts to support General Fund operations. Ponciano proposed creating a ledger of those transfers to give the council a clearer understanding of how much the city depends on outside funding sources.
City Treasurer Devin Kelley said the budget itself did not provide council members or the public with enough information to understand the city’s financial condition. Kelley urged the city to reevaluate how the document is prepared and begin providing monthly or quarterly reports showing each department’s budget, spending and percentage of their total budget remaining.
“There is no person that’s not an accountant that could read this,” Kelley said, referring to the provided documents. “The more information you give, the less questions you’re going to get.”
Kelley also called for future spending plans to identify the assumptions used to develop the figures, including transfers and other decisions that could affect the city’s year-end position.
Councilmember Dave Markss proposed addressing the budget before the usual midyear review in February or March.
“I think we should do it Nov. 4 because we’ll know if Measure B passes or not,” Markss said. “That’s when we need to start looking at what we need to do.”
Including the General Fund, special revenue accounts and the city’s water and sewer enterprise funds, Colusa’s total 2026-27 budget includes approximately $45.38 million in expenditures. That amount includes about $17.36 million for the Water Enterprise Fund and $18.08 million for the Sewer Enterprise Fund.
Khan said the city does plan to move its financial reporting into a new accounting system and develop a clearer budget format. Before approving the budget, council members supported holding a workshop to determine what information should be included in future budgets and recurring financial reports.
The adopted budget took effect retroactively to July 1.