City staff presented the proposed fiscal year 2026 budget for Tax Increment Reinvestment Zone No. 2 and reviewed related capital projects for downtown, telling council members the budget includes construction bids already received and proposed management arrangements but requires council action to proceed. "So you have your budget in front of you," presenter Haas said, explaining revenue timing, participation rates and project uses.

Haas said TIRZ revenues are received two years after tax year certification and walked the council through participation by taxing jurisdictions: in the original downtown boundary all jurisdictions participate at 100 percent; in the expanded area the city participates at 75 percent, most other jurisdictions at 50 percent, and the school district (ISD) at 0 percent because state statute prevents its participation in the expanded area. He also said special local legislation treats the zone as if it were created before Sept. 1, 1999 for certain school-funding calculations.

Key budget points presented included estimated increment revenues for the coming year, developer agreements (Haas cited payments expected this year from the Crazy Water Hotel and the Baker Hotel), and a loan of $3,500,000 the TIRZ obtained for plaza and streets projects; debt service on that loan is included in the finance plan. Haas said the TIRZ proposes approximately $1,000,008 in hard construction costs flowing through the TIRZ to the construction manager, with other add-ons and corridor improvements still to be bid. He said contingency funds are being held separately.

Haas described a construction-management arrangement: the project will be managed by a city team (Nate, Carrie, Aaron and Haas) and supervised daily by a construction manager; staff said the contract manager under consideration is Duane Eaton and that payouts will flow from the TIRZ to the city. He told council the contractors who submitted bids have agreed to hold those bids for the city (bids have been out about 60 days), and that if the council approves the budget staff will proceed with the contracts and construction sequencing.

Council members asked about total project costs and schedule. Haas said the city expects to complete the work before the end of the next fiscal year if projects proceed on schedule. He also explained planned land swaps that will transfer small parcels to the city for public parking and pickleball courts and said landscaping oversight will be conducted by city staff to ensure plant selection and warranty compliance.

No formal council action on the TIRZ budget was recorded in the transcript during the presentation; staff invited questions and said they will proceed if the council votes to approve the budget at a subsequent agenda item or meeting.