Sweet Home budget committee reviews $41.3 million proposed budget, delays adoption while probing WIFIA loan and utility rates

Sweet Home Budget Committee members reviewed a proposed $41,300,000 city budget for fiscal year 2025'2026 on the first night of a multi-day review, with staff emphasizing the plan is a more "realistic" presentation than last year's aspirational appropriations and with formal adoption deferred until further information on a WIFIA loan and other details is available.

Chief Ogden, who presented the budget message, said, "This year's budget reflects our city's commitment to transparency, responsible stewardship, and strategic investment." He told the committee the total proposed budget stands at $41,300,000 and that the general fund is proposed at $7,710,000.

The nut of the discussion was how staff restructured the accounting and appropriations compared with last year. Staff said the previous fiscal package included large, anticipatory appropriations for projects that had not closed (including a large wastewater project), which produced a $97 million appropriations number last year; this year staff limited appropriations to known and reasonably likely revenues and noted they will return with supplemental budgets if and when loan proceeds or grants materialize.

Committee members pressed staff on several high-priority capital items and revenue streams. The Mahler Wastewater Treatment Plant project (discussed as the large treatment-plant capital effort) remains dependent on a WIFIA loan application; staff said completion of the fiscal 2023 audit is required before the WIFIA application can be finalized and before staff can present rate or repayment scenarios to the council. Chief Ogden said the city still expects to pursue the loan but must show audited financial statements in the application.

On utilities, staff presented enterprise fund forecasts and rate scenarios. The water fund was described as "healthy" under current plans but staff recommended regular, modest annual rate increases to avoid large, sudden hikes later. A prior 3% rate increase two years ago was noted; staff said small annual increases are generally best practice to preserve fund health. Greg (public works) highlighted an identified capital need at the water plant: a backup generator to keep treatment running during wildfire- or wind-related power outages. He said the generator is the plant's "biggest" near-term resiliency project.

The sewer/wastewater fund discussion focused on operations and the delivery timeline for the large treatment-plant project. Greg said in-house operational improvements and recent equipment work have reduced violations, but constructing a replacement plant will require debt decisions and a later supplemental budget. Greg recommended adding a certified wastewater position (an FTE) rather than continuing the current external contract that costs roughly $30,000 per six months.

Committee members also examined system development charges (SDCs). Staff said the city completed an SDC study in 2021 and phased in higher SDC rates through 2024; the current proposal reflects lower SDC revenue forecasts because building activity is expected to be quieter. Staff noted SDCs are restricted funds that can pay for master plans, SDC studies and eligible capital work.

Weddell Bridge, an historic covered bridge the council has prioritized for preservation, drew repeated concern from members. Staff said only visual inspections and benchmarking against similar communities have been done so far, and that earlier estimates are not fully current; staff reported $80,000 currently identified for the bridge (including a $75,000 transfer) but said full repair costs are likely to be substantially higher and that pursuing historic designation and related grant opportunities is underway. Staff also said temporary pedestrian closures could be used to slow deterioration while engineering and funding are resolved.

The committee reviewed smaller funds and special items: a planned $65,000 transfer from the general fund into the Community Enhancement Fund (noted in the budget), $30,000 shown previously for a community center utility/match line (detail: $25,000 utilities and $5,000 professional services in department-level pages), an $850,000 library capital appropriation sourced from donations for future library-site work, an economic development fund down to roughly $35,000 of available grant funds, a Willow Fund balance of about $97,000 for early engineering, and a reserve fund reduced by prior transfers (including a roughly $300,000 transfer used to seed the Willow Fund). Chief Ogden said staff will provide more detailed line-item information by the next meeting.

Stormwater capital planning also drew detailed discussion. Staff identified three near-term projects in the storm fund: a Third Avenue main replacement ($250,000), a Sixth Avenue main ($250,000) and a larger Twelfth Avenue upgrade (about $650,000). Staff presented three financing options: (1) raise the storm rate from $4 to $8 to fully cash-fund the planned projects; (2) take a loan for the large project and raise rates to about $6.75; or (3) defer the largest project and raise the rate modestly (example shown: $4.75) to retain reserve policy compliance. Staff emphasized that deferral is a policy choice and that projects can be postponed pending grants or future revenues, but several committee members expressed caution about repeatedly deferring needed infrastructure work.

Public safety and police budget items were discussed; Chief Ogden noted a proposed $200,000 capital outlay line as a potential match for a generator/solar resiliency grant and described modest increases in IT and training services (Justice Connect and Lexipol subscriptions). Staff also outlined an enterprise fleet program that has centralized vehicle purchasing and replacement.

No formal action to adopt the budget was taken. The committee elected a chair for the short multi-night session and approved the previous meeting minutes by roll call; further budget review and possible adoption or supplemental budgets were scheduled for the following meeting nights once staff can provide requested detail and the fiscal 2023 audit is complete. Staff committed to return with updated estimates for Weddell Bridge engineering, a clearer WIFIA application timeline once the audit is done, detailed department-level line items, comparisons of SDCs in nearby jurisdictions, and additional scenario modeling for storm and utility rates.

The committee adjourned to continue the budget review on the following scheduled night.