Budget showdown: council debates $33 million recreation center line as financial questions linger

Council members spent extensive time Monday scrutinizing how a proposed multigenerational recreation center is shown in the city’s draft FY26 budget and what financing steps remain before construction could begin.

City Manager Jones and several council members described the item as a planning placeholder intended to protect prior investments and design momentum; some council members said the presentation overstated the city’s ability to issue debt without additional steps.

Council member Mitchell pressed staff on fiscal standards and whether bonds can be issued without a referendum. “In order to issue bonds, it would either have to be a government obligation bond which requires a referendum or it would have to be a revenue bond which requires a full feasibility study,” Mitchell said. He and other members asked for a clear financing path and for the city’s financial adviser to return with guidance on options and impacts to the city’s bond rating.

City Manager Jones said the draft budget reflects design estimates and the need to protect investments and contractual timelines. Jones noted the city has already invested in design work and other preparatory steps; he said staff included the higher figure now because recent design feedback pushed the estimate above earlier placeholders. “We need to protect our investments that we’ve made up to this point,” Jones said, explaining that showing the project in the planning documents indicates “intentionality” to project partners and funders.

Council member Butler defended moving forward, framing the project as a high priority for equity and neighborhood amenities. “We have had $15,000,000 in our budget several times over the years,” Butler said, adding that rising costs and delays have increased the current estimate.

Council members and staff discussed financing options including government obligation bonds (referendum), revenue bonds (feasibility and pro‑forma required), public‑private partnerships, leaseback structures and other alternatives. Several members requested a near‑term briefing from the city’s financial advisor so council can examine the full list of capital projects in aggregate (rec center, auditorium renovation, East Point Path) rather than deciding in isolation. The city manager said he expected the financial adviser to return to the council in mid‑July.

No final vote on the budget occurred Monday; staff said failing to adopt a budget before the fiscal deadline would force the city to operate under the prior year’s budget, which would delay billing and other administrative tasks and could complicate implementation of personnel compensation changes scheduled for July 1.

Council members asked staff to return with clear options and a schedule for financing decisions, and several members emphasized that the council must choose a single approach before approving final budget language that assumes a $33 million line item for the rec center.