After two years of digging through St. Helena's books, a city-appointed Finance Committee delivered a verdict that cuts both ways: the city has no structural deficit in its general fund, but it faces a ballooning pension liability and a reserve cushion that's projected to shrink by the end of the decade. The committee's 28-page report was headed to the St. Helena City Council on Tuesday, Oct. 27, after an effort that began amid widespread concern the city was quietly bleeding money.
That concern turned out to be largely unfounded, according to the report, which found the city had no structural deficit contrary to the belief that prompted the committee's creation in the first place, as detailed by The Napa Valley Register. The committee, which approved the report on Oct. 8 before sending it to the council, found that city staff had consistently underestimated expected revenues and overestimated expected expenditures — a pattern that, when corrected using audited financial numbers rather than staff budget projections, revealed surpluses in 13 of the last 15 fiscal years. The committee found the city can cover its expenses through fiscal year 2030 without tapping any new revenue sources.
A Pension Bill That Keeps Climbing
The rosier-than-expected deficit picture comes with an asterisk. St. Helena's unfunded employee pension liability stands at $16.2 million and is growing by about $1 million a year, up from $12.5 million in 2019-2020, according to the same Napa Valley Register report. The Finance Committee recommended the city pay an additional $450,000 to $600,000 annually toward that liability, and CalPERS projections cited in the report indicate that discretionary payments of $500,000 a year would get the city to 80% pension funding in eight years and 90% in 14 years.
Mayor Paul Dohring has previously warned that without intervention, St. Helena could be looking at more than $20 million in unfunded CalPERS liabilities by 2030.
Deficits Loom Even Without the Pension Problem
Even setting pensions aside, the committee's own forecast shows trouble ahead. It projects general-fund surpluses for the next three years, followed by deficits of $332,000 in fiscal year 2029 and $822,000 in fiscal year 2030 — a combination that would shrink the city's General Fund reserves from 73% today to 59% in 2030. That's still above the 30% minimum reserve set by council policy, but the trajectory is moving in the wrong direction at the same time pension costs are climbing.
The committee also recommended the city make better use of restricted funds for parks, equipment replacement and civic improvements, among other purposes, and urged the city to improve compliance with its own financial policies — including more regular reporting and forecasting.
Staffing, Compensation and a Push to Keep the Committee Alive
The report included recommendations on class and compensation studies that influence employee pay, hiring qualified financial leadership, commissioning a credible compensation study and ordering annual compliance audits.
According to the Register, the report took no position on Measure S — the half-cent sales tax increase the council placed on the Nov. 3 ballot, projected to raise about $2 million annually for the general fund according to the Press Democrat.
The Finance Committee that produced the report consists of Chris Warner, Mark Smithers, George Schisler, Gregg Dawley, Garry Rose and Richard Garber. City staff had separately estimated reserves could fall below the 30% policy threshold in fiscal year 2029-30 if current conditions persisted, a warning that helped drive the city toward placing Measure S before voters even as the Finance Committee's own work continues to shape how St. Helena manages the years ahead.
