Hermiston staff report revenue shortfall, warn fund balance could dip below policy; multiple capital projects slated for 2026

City finance and public works staff told the Hermiston City Council on Sept. 22 that August revenues lagged projections and that a one-time accounting transfer has created a projected dip below the city's 15% minimum fund balance in June 2026 unless adjustments are made. Finance staff reported that monthly revenues were about $466,000 under projection for the second month of the fiscal year, primarily because of timing in building fees and grant revenues. General fund expenditures were reported roughly $2,000,000 over projection, driven largely by a one-time transfer to create a new building fund intended to improve transparency for those restricted funds. Budget specifics staff provided: "The city has a 15% minimum fund balance requirement... 15% of that amount was $2,900,000 for this year. We are showing a, we anticipate that we will drop under the minimum by about $200,000 in June 2026," Finance staff said. Staff explained the projection reflects the onetime $2,700,000 transfer; when the restricted cash and $970,000 in reserves are accounted for, staff said the concern is mitigated. Council unanimously accepted the August 2025 monthly financial report. Capital projects and timelines: Public works and city staff reviewed multiple capital projects, many advancing to design and construction in 2026. - Gere and Harper realignment: Staff said they now have railroad approval to proceed with full design; bidding is planned this winter with construction expected in 2026. The council was warned the intersection and railroad crossing will be closed for several months during construction. - Orchard Avenue waterline replacement (Seventh to Eleventh): Staff said they will seek bids in winter with anticipated construction in the May'October 2026 construction season; full-width surface restoration is planned and staff said they hope to include sidewalk repairs depending on budget. - Library project: Books have been returned to the building but a state elevator inspection delayed the grand opening; staff set a tentative grand opening for Oct. 10. - Public Safety Center and airport hangars: The Public Safety Center is nearing completion with a target move-in January'February; airport hangars are finishing interior work and expected to be occupied in coming months. Why it matters: The reported shortfalls and transfers affect projected reserves and may influence mid-year budget decisions. The construction timelines indicate months-long traffic disruptions for several corridors and require advance notification to affected businesses and residents. Next steps: Staff said they will continue to monitor revenue timing, coordinate public notification for construction (including prominent signage and web updates), and proceed with design and bidding milestones for projects scheduled in 2026.