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City manager presents FY26 ‘hold‑steady’ budget; TIF scenarios and modernization projects highlighted
Summary
City Manager presented the FY26 proposed budget based on a 3.39% scenario and outlined next steps in the adoption schedule; staff highlighted planned modernization (new website, finance system, permit modernization), new professional hires and TIF modelling showing range of outcomes depending on future development.
At the Dec. 12 budget retreat, city management presented the proposed FY26 budget and a timeline for adoption. The draft budget follows a 3.39% scenario the manager used as staff’s working recommendation and is intended to hold property‑tax increases modest while allowing department priorities and limited additions.
The city manager said the budget package includes continuing modernization work — a new city website scheduled for early January, a new finance system contract under review, and an ongoing permit‑modernization project that will go live in January. The manager also described two new professional hires budgeted for FY26: a climate action manager and a data manager (who will supervise a GIS analyst), plus continued investment in IT and cybersecurity.
Finance staff provided three TIF (Tax Increment Financing) scenarios showing long‑term variability depending on development: a “known” scenario covering currently permitted projects, and two growth scenarios (adding 35 or 61 housing units per year over a defined period). Under the known scenario, modeling shows a municipal shortfall in the final TIF tail year (roughly a $2.9 million negative balance at the end of payout); the 35‑ and 61‑unit/year scenarios close that gap and produce positive municipal surplus and recurring municipal revenue when the TIF debt is retired. Staff explained the scenarios as models rather than predictions and noted they will present detailed sensitivity analyses to the council on request.
The manager also reminded the council of scheduling: department presentations continued at the retreat, with additional council discussion on Monday, Jan. 6 and a public hearing and vote planned for Jan. 13. Staff flagged known emerging requests that were not yet in the FY26 base (for example, an anticipated SB3C request and potential Safe Routes to School asks) and offered to prepare budget trade‑off scenarios for the council’s review.
Ending: Council asked staff to return with scenarios that illustrate the tradeoffs needed to add specific items (striping, sidewalk work, Safe Routes items) while holding to the 3.39% tax‑rate target and to provide a concise summary of penny/fund balances ahead of Monday’s meeting.
