Like many area residents’ bank accounts around Christmas, Jamestown’s savings account isn’t nearly as big as it was when the month started.

City residents aren’t getting any shiny new toys from city government this year for Christmas — they’re just paying some really big bills.

The state Court of Appeals’ decision last week not to hear the city’s appeal of a 2018 arbitration panel’s ruling to award Kendall Club Police Benevolent union members a 2% pay increase for 2016 and 2017 means the city will be writing its police officers a $1.1 million check to meet the arbitrator’s ruling. Couple that decision with the City Council’s decision to use about $400,000 of the surplus to balance the 2021 city budget, and all of a sudden the $3.9 million fund balance the city started the year with has been cut nearly in half in the span of about three weeks.

Don’t forget, a similar raise is likely coming at some point in the future for city firefighters who are still waiting to resolve their contracts for the same period. Settling that contract essentially empties the fund balance.

And, both the police and the firefighters have more unresolved contracts that either need to be negotiated or be settled by an arbitrator. Those settlements won’t be cheap.

We’ve said for years that the city’s surplus is really a paper tiger given the city’s unpaid obligations to employees. Now we’re seeing just how paper-thin that tiger really was.

The city’s options are basically to nickel and dime people to death with fee and fine increases to raise revenue or make draconian cuts, though cutting the budget is limited given imposed and bargained minimum staffing requirements.

Frankly, the city needs better options.

Mayor Eddie Sundquist needs to continue his work on retiree health care, but he’d be wise to achieve that gain at the bargaining table rather than trying to make the move unilaterally. It’s time to revisit talks between the city and county over policing as well.