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Lawrence officials present balanced FY26 budget; $5 million in ARPA-linked reserves tapped for school, police debt service
Summary
Acting chief administrative and financial officer Ramona Sabados presented a balanced FY26 municipal budget totaling $469,611,865 and said the package relies in part on a $5 million draw from a debt-service stabilization reserve built from ARPA/free-cash transfers to cover additional debt service tied to two new schools and a police station.
Ramona Sabados, the city’s acting chief administrative and financial officer, told the Budget & Finance Committee on May 19 that the proposed fiscal year 2026 operating budget is balanced with total operating revenues and expenditures of $469,611,865.
Sabados said the FY26 proposal includes the statutory Proposition 2½ allowable property tax increase and projects $1,200,000 in new growth. She explained the administration used a mix of traditional revenues and reserve transfers to balance the package.
Why it matters: Councilors pressed for clarity on a $5 million item that will be appropriated from a debt-service stabilization reserve. Council President Giovanni Rodriguez expressed concern that the reserve transfer — established after a past transfer of $20 million from ARPA/free cash into a debt-service stabilization reserve — appears to be covering a portion of the debt service for two school projects and the new police station.
Sabados said the $20 million transfer from ARPA was earmarked to help the city cover additional debt service tied to two new schools and the police station, and the $5 million in FY26 is a draw from the Debt Service Stabilization Reserve for that purpose. She directed councilors to the debt schedules in the budget book appendix for amortization details and said additional borrowings remain possible because not all authorized bond proceeds were drawn at the time the projects were underway.
Councilors asked for supplemental detail showing exactly where the $5 million appears in amortization schedules and how the amounts were calculated. Sabados agreed to provide the amortization schedules and a line-item breakdown and to return with the revenue presentation at the committee’s next hearing.
The Committee also reviewed the budgetary context: health insurance and pension costs are rising, limiting discretionary room within the Proposition 2½ ceiling. Sabados said that, because of those pressures, departments were asked to submit level-funded budgets with targeted requests documented for mayoral review.
Ending: The committee recessed after the presentations and agreed to continue the revenue and expenditure review at a later hearing, when Sabados will present the revenue detail and the debt-service amortization schedules requested by members.
