Logo courtesy of Live Oak

LIVE OAK, CA (MPG) - The City of Live Oak is facing a severe structural budget deficit, with a shortfall of nearly $1.9 million in its General Fund for the 2025–2026 fiscal year. At the City Council meeting on Oct. 1, City Manager Ben Moody presented six recommendations to address the deficit, including deferring capital improvement projects, renegotiating public safety contracts and reducing impact fees to encourage economic growth.

Live Oak’s General Fund is projected to receive approximately $5.3 million, while expenditures are expected to reach $7.2 million. The majority of General Fund expenses are tied to public safety, with the City currently contracting with the Sutter County Sheriff’s Department for approximately $2.7 million annually and the Sutter County Fire Department for $1.3 million annually.

“Public safety is our top priority, and we are hoping to continue services at the current level,” said Mayor Jeramy Chapdelaine. “But the reality is, we are facing a tough financial situation. We must make some difficult decisions, either finding new ways to increase revenue or making cuts to services.”

In addition to the General Fund deficit, the City is also grappling with challenges in its enterprise funds. The Sewer Fund, which has not seen a rate increase in years, is also currently running an annual deficit of $1.8 million.

“The rising cost of public safety, combined with flat revenues and outdated fee structures, has put the city in a difficult position,” Moody explained. “Deferring non-essential projects and reviewing contract obligations are necessary steps, but long-term solutions will also require a serious look at revenue generation.”

City Manager Moody reminded the council that existing contracts with the Sheriff’s Department and Fire Department require 12 months’ notice for cancellation and needed time for substantial amendments, meaning any adjustments would take effect in the next fiscal cycle.

The City Council voted 4-1 to authorize the City Manager to initiate the 12-month prior, written contract termination process with Sutter County Sheriff and Sutter County Fire, and to begin negotiations to establish contract services that the city can sustainably afford. This means that the current public safety services would end in November 2026 if the city does not establish needed revenues or significantly reduce service in coordination with the county’s needs. The City Manager will provide further correspondence to council for the additional recommendations.

The City Council will continue to review options over the coming months and is committed to transparency in keeping residents informed as decisions are made.