City staff used a continuation of the special budget workshop to detail proposed FY2026 revenues and expenditures across enterprise, trust and special revenue funds and to set the schedule for public hearings. The council and staff reviewed major items including water and sewer staffing changes, drainage and hotel‑motel fund arrangements with the Chamber, an $800,000 transfer proposed from the insurance fund to the general fund, and capital plan items that would defease portions of the 2018 bond. No final budget adoption occurred tonight.

Why it matters: the workshop establishes the fiscal assumptions and public‑hearing timetable staff will use to finish the FY2026 budget. Staff said the adopted tax-rate option will be used to build the budget and that review of utility rates will continue with a presentation planned from NewGen Strategies on September 2. Several funds have multi‑year commitments or required actions — for example, the waterworks and general street CIP pages showed planned defeasance activity to reduce outstanding 2018 debt, and the Drainage Utility Fund includes a grant match to support a master drainage study.

Major fund highlights discussed: public works and streets — staff reported street department staffing remains at eight and described large material line items, including an $800,000 materials budget figure that will be used for road repair; public works staff explained per‑linear‑foot material costs vary widely (examples provided: about $600/linear foot for contractor work on MH 379 versus roughly $70/linear foot for chip‑seal preparation work the city crews perform). Water and sewer — staff proposed adding three water distribution employees to focus on hydrants and mains and itemized major costs including $400,000 for water meters and ongoing meter‑reading software fees. Utility billing — staff said they plan to recommend a convenience fee or surcharge option to offset merchant and credit‑card processing costs and that an upgrade will let customers opt into electronic bills. Drainage fund — staff described a $22,500 match for a drainage master study being led by Gage Engineering and continuing cost allocation from the general fund. Hotel‑motel tax — staff reported 12 local hotels pay a combined 13% tax rate (7% city, 6% state) and said the city is negotiating a revised contract with the Chamber of Commerce to improve oversight of tourism funds and include city representation on the tourism advisory board. Trust funds — staff proposed using Woodland Park Trust earnings and library trust proceeds to fund cemetery software and a park project respectively; details and amounts were presented for review. Insurance fund — staff proposed a one‑time transfer of $800,000 from the insurance fund to help the general fund balance in FY2026 while projecting employer medical and workers’ compensation expenses for the coming year.

Questions and concerns: multiple council members emphasized employee retention and cost‑of‑living adjustments; one councilmember asked staff to continue exploring ways to avoid leaving staff behind as costs rise. Council also questioned third‑party inspection costs for development review; staff explained inspection fees are partially offset by permit revenues and said inspection spending has historically been lower than the current budget estimate because several subdivisions and projects are expected to come online.

Process and timing: staff asked the council to schedule the required public hearings and to proceed with the notice timelines; council directed staff to advertise and to present additional detail on September 2 and at the formal hearings planned for September 16. Final budget adoption will occur following the public hearing schedule.

What didn’t change: the meeting did not adopt the budget; it continued the workshop and set procedural deadlines and follow-up tasks for staff.