Auburn officials say $2 million budget gap remains; propose tax increase, retirement incentive

City Manager Jeff Dyger told the Auburn City Council on April 24 that the recommended 2025–26 budget still faces a $2,000,008.73 shortfall after departments cut spending, revenues were adjusted and options for debt restructuring were applied.

The shortfall follows an initial gap of about $8.6 million identified early in the budget process, Dyger said, and officials have narrowed it with a combination of cuts, revised revenue estimates and potential debt restructuring. “By doing that, we've gotten the shortfall down to $2,000,008.73,” Dyger said.

The gap matters because it affects core services and leaves the council with limited choices: further cuts to operations, restructuring debt for near-term savings, a modest property tax increase that would exceed the state cap if used, or additional one-time measures such as the newly adopted retirement incentive. Comptroller Mary Beth Leeson said the city must weigh service impacts before turning to personnel or other cuts. “We're providing essential services that everybody relies on,” Leeson said.

Key measures discussed

- Retirement incentive: The council adopted a resolution creating two time-limited incentive options for eligible employees (details in a separate council action). Dyger said the administration’s planning estimate for potential savings from retirements tied to the incentive was about $300,000 but that actual savings will depend on participation and which positions retire. The first option requires notice by May 17 with last day of service by June 30; the second option requires notice by July 18 with last day on or before Aug. 31.

- Debt restructuring: Dyger identified roughly $381,000 in potential savings from converting short-term debt to longer-term obligations. He said additional restructuring could reduce the gap further but would require council approval of financing changes.

- Tax and rate changes: The proposed budget includes a 2% property tax increase and 2% rate increases for water and sewer that follow recent rate-study recommendations. Dyger said the tax increase and rate adjustments are intended to stabilize funds while limiting the use of fund balance.

- Solid waste and utility funds: Leeson said the solid waste fund required a subsidy from the general fund this year of about $325,000; the recommended trash fee increase would allow repayment of roughly $80,000 of that subsidy. The Power Utility Fund currently owes the general fund about $2.6 million, Leeson said; the city plans to propose a repayment schedule within six months.

Council response and next steps

Council members praised department-level reductions but pressed for additional detail before approving the budget. Councilor Cuddy and Councilor Kent commended department heads for cuts; Councilor Kent asked for line-item breakdowns, a list of current vacancies and a list of open purchase orders and encumbrances to guide further decisions. Dyger and Leeson said they will provide those details and continued to urge caution about cutting frontline services.

The council and administration also discussed health insurance costs and the city’s consortium plan; Leeson and Dyger said the issue will require further study and possibly an RFP to compare alternatives and long-term costs.

The council set a May 17 deadline for employee notices under the retirement incentive; final budget votes will await further detail on participation, any state budget allocations and additional council direction.

Ending

Officials said they will return with the requested line-item data, vacancy and encumbrance lists and the results of any debt-restructuring options as the council works toward a balanced 2025–26 budget.