Matt, a finance staff member, presented the city’s draft 2026 budget, warning that the general fund balance is declining toward the city’s 30% target and outlining proposed staffing and capital requests.

Why it matters: The finance presentation framed immediate trade-offs the city faces as staffing returns to full levels and one-time savings used in prior years are no longer available. Council was asked for direction; no vote occurred.

Matt said the city began the budget process in March and had already “cut about $700,000 from budget requests in the General Fund and about $200,000 from other funds” to reach target fund-balance levels. He showed a forecast in which the fund balance — the “purple line” — falls from 40% at the end of 2024 to a projected 33% by the end of 2026 and to 23% in the longer term.

Staff framed the challenge as the combination of returning to full staffing levels and recurring operational needs. Matt noted new position requests including an IT specialist (about 60% funded by the general fund), two line maintenance workers to form dedicated three-person crews for sewer, hydrants and waterlines, a SCADA analyst and steps toward a third electric distribution crew. He also recommended multiple reclassifications: administrative assistants to specialist roles, a municipal court clerk to lead court clerk, property evidence tech 1 to tech 2, and an increase in the fiscal services manager salary range “comparable to, say, the city engineer or utility manager.”

On compensation, staff proposed a 4% merit pool and noted built-in 4% STEP increases; eligibility would be limited to employees employed on or before July 1, 2025. Matt estimated the combined cost to the general fund of promotions/reclasses at about $470,000 and $218,000 for other funds, with total promotion/reclass costs around $40,000 (for the positions specified).

Capital and maintenance items highlighted for the 2025 revised budget included $300,000 for a wastewater master plan and modeling, $120,000 for a new grinder at Kill Creek intake, $80,000 for a crane truck for electric distribution, $260,000 for a new sewer camera van, $250,000 added to the water system repair and maintenance line for a planned project, $45,000 to replace gate openers at Electric Admin, Electric Distribution and Public Works, and $80,000 for a new truck for building services. He also recommended finishing replacement of aging 2015 IT switches because failures “pose a significant risk to city operations.”

Matt asked the council for direction on the highlights and said staff would return with more detailed discussion at the June 16 meeting and with mill-levy materials after updated appraisal values are received from the county on June 15. No formal motions or votes were taken on the budget at this meeting.