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Finance director outlines $1.05M plan to fund collective-bargaining settlements in proposed budget amendment
Summary
Finance Director Steve Groom presented a proposed biennial budget amendment that would reforecast utility-tax receipts and reallocate various fund balances to cover $1,050,000 in collective-bargaining settlements and several restricted capital and IT items; the committee voted to send the ordinance to public hearing and first reading on June 3.
Finance Director Steve Groom presented a proposed ordinance (Ordinance 02/2025) to amend the 2025–26 biennial budget and fund a set of items including collective-bargaining settlements and several capital and IT expenditures. FEDRAC voted on May 27 to send the ordinance to public hearing and first reading on June 3.
Groom said the largest single need is roughly $1,050,000 to fund recently settled collective-bargaining agreements, including retroactive pay for certain units. To create capacity in the general fund, staff proposed a combination of a more favorable utility-tax forecast, a modest downward adjustment to sales-tax projections, and program-level revenue recognition (for example, right-of-way permitting revenue) that together would produce the net resources required to fund the settlements.
Groom described the approach: he expects utility-tax receipts to come in about $1.2 million higher than the budgeted forecast, while he recommended trimming sales-tax projections and recognizing an additional $300,000 of right-of-way and inspection fee revenue in the street fund. That right-of-way revenue would reduce the street fund’s need for general-fund subsidy and free up the offsetting general-fund dollars for collective-bargaining costs. Several smaller items in the amendment — including a $400,000 land purchase (Steel Lake), IT capital replacements, copier and equipment replacements, and park restricted-donation items — would be funded from existing restricted fund balances or specific revenue sources.
Groom warned that while the amendment balances the near-term obligations, the general fund will have less flexibility going forward and that sales-tax underperformance remains a risk. “If anything else comes up, we're going to have some really tough decisions,” he told the committee. The amendment will return to council for public hearing and first reading on June 3 and second reading on June 17.
Why it matters: The amendment would incorporate retroactive salary and benefits obligations into the adopted biennial budget and shift some capital purchases into available restricted fund balances. The change affects the city’s near-term fiscal flexibility and requires council adoption.
What’s next: Public hearing and first reading June 3; second reading and final adoption scheduled June 17.
