Rathdrum council adopts $46.99 million 2025–26 budget; council removes 1% foregone tax

The City of Rathdrum on Aug. 27 adopted a $46,990,355 fiscal year 2025–26 budget and voted to publish the ordinance in full, after discussion about proposed property tax and foregone levies.

City staff said the budget is balanced and includes $18,931,253 in budgeted general fund revenues, which combine property taxes, fund balance transfers and other revenues. Leon, a city staff member, told the council that $10,000,000 of projected revenue is a planned transfer from the general fund into a special revenue fund to pay for a new city hall project and that the transfer appears in several places in the budget presentation to reflect where the dollars will be spent.

The adopted budget includes a 1.9% property tax increase (listed as $72,624 in the presentation) and an initially proposed 1% foregone tax amount (listed at $40,893). Councilmember discussion focused on whether to take the full proposed increases and whether several position conversions and new hires were needs or wants. Council members noted the proposed increases would fund two law enforcement positions and convert two parks and recreation employees from seasonal/part-time to full-time, as well as equipment for two police vehicles.

Councilmember John (surname not specified in the record) argued the parks positions were a “want” rather than a demonstrated need and requested more metrics showing the necessity of converting seasonal/part‑time positions to full time. Staff and other councilmembers responded that planned park projects — including expansion of Raptor Mountain Park, a new park at the city hall site and the Brookshire subdivision park if a pending grant is successful — will increase workload and that parks staffing shortages can lead to employee turnover.

Council deliberations clarified how Idaho tax law interacts with local levy calculations. The council discussed House Bill 389 and its effect on new construction and annexation calculations (the presentation stated the bill reduced the city’s recoverable new‑construction/annexation value by roughly 10%). Staff said the levy rate (the city’s tax rate) was projected to fall despite the budget increases because assessed market values and new construction raised the overall taxable base; staff gave a numeric example showing a $400,000 taxable home could see its city tax fall from $888 to $826 under the presented assumptions.

After debate, the council placed the annual appropriation ordinance on first reading by title only under suspension of rules and waived second and third readings, then voted to adopt the ordinance and to publish the budget in full. Separately, the council approved a motion to remove the 1% foregone tax increase of $40,893 and to reduce the 1.9% property tax increase so that the net dollar change from staff’s initial high‑watermark proposal was $43,017; the council approved that motion by recorded vote.

Votes at the council’s roll calls were read aloud by the clerk during the meeting; the record shows the motion to remove the foregone and reduce the property tax passed by a majority vote.

The council and staff noted next steps: because the council chose not to take the full foregone at this meeting, staff will research whether the city can reserve the foregone amount for a future year and return a resolution at the next meeting if required.

The budget presentation included additional details the council referenced in deliberations: special revenue funds for streets ($1,725,541), police ($1,025,000), parks ($3,600,000), the city hall fund ($10,000,000 transfer), cemetery special revenue, a water fund balanced at $4,569,561 and a sewer fund balanced at $7,121,000. Staff emphasized that the $10,000,000 transfer is a balance‑sheet movement from the general fund into the special revenue fund for construction of the new city hall.