Jamestown City Council members are expressing concern over the city’s shrinking surplus.

They’re right to be concerned. The city should have roughly two months’ worth of savings to be able to keep the city running in case something catastrophic happens and anticipated revenue doesn’t come in. That would mean carrying about $7.5 million in its surplus at any given time. Jamestown will head into 2026 carrying about half of that amount after allocating an expected $3.5 million from the surplus to lower a nearly 10% tax hike.

While the fund balance is a concern, it isn’t the concern when it comes to city finances. The fund balance can be rebuilt relatively quickly, as Council President Tony Dolce, R-Ward 2, said during last week’s meeting. A year of sales tax receipts coming in higher than budgeted, a year when there aren’t catastrophic health insurance cases or even a year when the city doesn’t need to use its contingency fund can help rebuild the surplus over a couple of years’ time.

The bigger issue to solve is why the city has had to dip into one-shot revenues the past couple of years to manage what would otherwise have been even heftier tax increases. The answer is something no one wants to hear – the cost to provide essential city services is too high. Seventy-five percent of the city’s more than $44 million budget pay for salaries and benefits. Another 15% is contractual expenses, debt service is 4% and capital expenses are 6%. In short, the reason to dip into the surplus isn’t a contract for events or buying a new fire engine – it’s employees.

Revenues aren’t increasing as fast as the cost of the employees to provide public works, parks, police, fire and EMS services. That’s why it was important for the city to push for more revenues that don’t come from city property owners in the form of taxes. One of those pushes was denied by county lawmakers in the form of an additional percentage of sales tax revenue to municipalities like Jamestown and Dunkirk. So far the state hasn’t said it is willing to increase the city’s state aid. Money to pay the bills has to come from somewhere, and next year it’s coming from the city’s fund balance and your checkbook.

There should be worry about the city’s fund balance. There should be greater worry about the costs that are driving the use of the fund balance. And, there should be more discussion of how to lessen those costs.