Committee recommends civil city 2026 budget after briefings on COLA, sanitation subsidy and audit timing

Jessica McClellan, city controller, presented Appropriation Ordinance 2025-11, the civil city budget for 2026 and a companion packet describing changes since the budget hearings.

Why it matters: the ordinance sets the city’s operating plan for 2026, includes pay adjustments for employees, and flags budget items that could lead to additional appropriations or policy decisions during the year, such as added general-fund support for sanitation services and the city’s audit schedule.

McClellan said the advertised total for the civil city budget in the packet is $163,152,557 and that the most substantial change since the hearings was adding 0.7 percentage points to the COLA for nonunion regular appointed employees, bringing that COLA to 2.7%. She said police and fire budgets already included a 3% increase and that the city has agreed to a 5% increase for AFSCME members; AFSCME negotiations were described as ongoing.

Council members asked detailed questions about tax-rate advertising and how the Department of Local Government Finance (DLGF) sets final rates. McClellan said the table in the packet advertises a high rate (1.36 in the packet) to give the DLGF flexibility; she estimated the city’s actual tax rate will be lower (she cited an estimate around 0.8426) once the DLGF certifies the budget and the certified net assessed value is applied. She warned that small differences in the advertised rate versus the certified rate can have large dollar impacts if rounding reduces the certified levy the DLGF assigns.

Sanitation funding drew extensive questions. McClellan said the sanitation fund is self-contained and has been subsidized from the general fund historically; the memo shows increased proposed general-fund support (the packet notes an increase of approximately $883,699 compared with prior figures). Controller McClellan told council that the sanitation fund is not charging at the full cost of service and staff will return with detailed cost and rate options for council decision. She and council members discussed that the city typically brings an additional appropriation later in the year, if necessary, rather than finalize a midyear rate change at adoption.

Council members also asked about an export/error in some published budget sheets. McClellan explained a data-export macro and a reformatting of Economic & Sustainable Development (ESD) budget lines caused some hash marks and mismatches between New World (the city’s accounting system) and the published budget book; that issue was corrected and resulted in a $2 million correction to an earlier deficit figure.

Public comment: Kevin Keough, an online speaker, asked about the timeliness of the city’s annual comprehensive financial report (ACFR). Keough said the 2023 ACFR had not been posted (he noted the 2023 report was completed mid-July in the past year) and urged more timely audits; he referenced a separate April 1 annual financial report (AFR) deadline and asked the city to aim for timelier ACFR completion to aid budget transparency. McClellan said the city had been catching up on past-year ACFRs after administrative transitions, that the 2024 ACFR is being worked on and the goal is to return to a normal cycle with ACFRs completed by September 30 in future years; she also confirmed the April 1 AFR filing (a smaller state-facing report) has been timely.

After questions and a final motion, Clerk Bolden recorded a 6–0 committee recommendation to the full council for adoption of Appropriation Ordinance 2025-11.

What’s next: council action on the ordinance; staff follow-ups on sanitation cost/revenue analysis, any needed additional appropriations, and the controller’s plan to return ACFR schedule to normal timing.