Rathdrum council adopts tentative FY25/26 budget that includes $10 million city‑hall transfer; adopts budget despite debate over parks staffing

The Rathdrum City Council voted to adopt the tentative fiscal year 2025–26 budget after staff presented revenue and expenditure totals and explained a planned $10,000,000 transfer from the general fund to a special revenue fund to pay for the city‑hall project.

City staff presented the budget package to the council and said the administrative and finance portion of the budget is $16,291,203 and that the proposal includes a $10,000,000 transfer from the general fund designated for the city‑hall project. Staff listed water fund revenue at $4,569,561 and sewer fund revenue at $7,121,000 and presented total city revenues as $46,990,355.

Staff explained the $10 million appears as both a revenue and an expenditure line because the general fund must transfer the cash into the special revenue account in order to spend it on the project. Staff said the general fund balance before the transfer was about $10.2 million and that, after moving $10,000,000, the unrestricted general fund balance would be sharply reduced; in discussion staff said the fund balance after the transfer would be "about 200,000," while contingency and designated reserves would remain for a short‑term cushion.

Finance and planning staff also told the council that a county new‑construction valuation figure changed in the last two weeks. Staff had been using a $139,000,000 new‑construction market value; the county submitted a revised figure of $110,000,000, a $29,000,000 decrease that staff attributed to a reassessment of which land‑use changes qualify as "new construction." That change lowered the estimated levy rate and — despite the proposed addition of $73,000 in property tax revenue (1.9% of the tax base) — staff showed the estimated tax bill for a $400,000 taxable home would fall by about $62 under the new levy calculation compared with last year’s levy rate.

The budget discussion included parks and recreation requests: parks staff asked to convert one part‑time position to full time and one seasonal position to full time (the proposal was discussed as roughly two positions overall) to avoid frequent office closures and to sustain cemetery recordkeeping and pathway and event maintenance. The estimated total cost for the two positions was described in discussion as "around $72,000." Council members asked whether those positions could be funded by reallocations, fees, or by using savings; staff said some options exist but that, given current cuts to other projects, the positions could require a tax change unless other revenues or reductions are identified.

Councilmember John Hatcher moved to adopt the tentative budget for fiscal year 2025‑26; the motion was seconded and the council approved the tentative budget. During debate several council members noted that once the tentative budget is adopted for public notice and hearing it serves as a ceiling for next year’s expenditures and the council may reduce but not increase the adopted spending ceiling before final adoption.

Staff said the tentative budget will be published for a public hearing and that the public hearing will be held after the required notices are published in the local newspaper.