McCall council sets tentative $42.24 million FY2026 budget; schedules hearings on foregone levy

The McCall City Council on Wednesday set a tentative Fiscal Year 2026 budget of $42,244,085 and approved moving forward with a foregone-property-tax request to cover operating and maintenance needs, councilors said during a two-hour work session on the draft budget. Council also scheduled public hearings on both the tentative budget and the foregone amount for Aug. 14.

The tentative budget includes $24,456,545 in general fund expenditures, $2,879,397 for the golf enterprise and $14,908,143 for the water department, according to staff presentations. Randy, the city finance lead, told council the goal for FY2026 was to balance operations and maintenance (O&M) with revenues so the city would not draw down reserves for routine services.

Why it matters: the tentative budget and the foregone levy set the maximum the city may spend next fiscal year and trigger statutorily required public notices and hearings. Council approval of the tentative total and the foregone request authorizes staff to publish the numbers and solicit public comment before final adoption.

Key elements and council discussion

City staff said the proposed FY2026 budget balances O&M locally while preserving capacity for capital projects. Randy said the budget assumes a projected drop of roughly 30% in certain development-fee revenues tied to permit administration being shifted to the county — a loss staff estimated in the hundreds of thousands — but that new construction and increases in tax base offset much of the gap. “The budget this year, the goal was to . . . make O&M balance with our revenues so that we're not drawing down reserves for operations and maintenance,” Randy said.

The draft funds several staffing additions requested by departments: one new police officer (bringing the department closer to a 15-officer target), a parks lead, two part-time parks positions and 0.3 full-time equivalent additional library hours to respond to increased patronage at the new library facility. Staff also reported the golf operation is projected to be self-sustaining on O&M, while the water department carries a large capital program with about $11 million in CIP projects next year.

Property tax and foregone levy

Staff presented a revised way of showing property-tax distribution that sweeps required departmental shortfalls into property-tax revenue for clarity. That presentation showed the city’s property-tax levy increasing from about $8.349 million in FY2025 to about $8.875 million in FY2026 — an increase staff said reflects new construction and limited recapture of prior foregone levies and penalty/interest collections. Staff noted the state limits base increases to 3% but allows new construction and other limited additions that pushed the city’s calculated levy-change figure to about 6.3% in staff’s presentation; overall statutory caps and code limits were discussed during the meeting.

Council approved a foregone levy amount to capture a small additional share of property-tax revenue for O&M purposes; staff presented the foregone amount in the packet as $84,006.81 and the council motion recorded at the meeting referenced $84,681. The council voted to approve the staff-presented foregone levy request and to set the statutory public hearing on Aug. 14.

CIP priorities and notable projects

Staff reviewed the capital improvement program (CIP) and highlighted several projects: a large water-department program (roughly $11 million, funded in part by DEQ financing), city campus site improvements (paving and ADA connectivity), Woolley Avenue design and phased reconstruction (design in FY2026 with construction later), Willie Avenue pathway extension, and various street maintenance and asphalt-restoration programs. Staff also showed a table of deferred projects through FY2030 to make visible what remains unfunded.

Housing, MRA and museum site

Council and staff discussed consolidating housing-related line items into a single housing fund to improve transparency. Michelle, who manages housing and community development budgeting, summarized that the FY2026 packet separates the community development general budget (1048) from an 85-series housing fund that aggregates deed-restriction and local-option-tourism-tax commitments. Council also directed staff to prepare an agreement for an administrative transfer from the McCall Redevelopment Agency (MRA) so MRA will contribute roughly $50,000 toward city staffing that currently supports MRA activities.

Kurt Wolf, Parks and Recreation director, told council the city is increasing investment at the Central Idaho Historical Museum site to address deferred maintenance and sewer issues and to prepare the site for future public use and revenue opportunities. “That site has huge potential,” Kurt said, describing work to repair aging historic structures and fix groundwater infiltration affecting sewer lines.

Next steps and hearings

Councilors voted to set the two required public hearings for Aug. 14: one on the tentative FY2026 budget and one on the foregone-property-tax request. After the public hearings and any adjustments, council will consider a final adoption ordinance at a subsequent meeting.

Votes at a glance

- Tentative FY2026 budget: motion to set the tentative maximum expenditure at $42,244,085 — moved by Council member Julie; seconded by Colby; roll-call vote recorded in favor, motion carried.

- Foregone levy request: motion to approve the foregone amount (packet figure presented as $84,006.81; motion text referenced $84,681) for FY2026 O&M needs — mover: Julie; seconder: Colby; roll-call vote recorded in favor, motion carried.

- Public hearings: motion to set public hearings on the tentative budget and the foregone request for Aug. 14 — moved and seconded; roll-call vote recorded in favor, motion carried.

What council did not decide

Council did not adopt the final budget or change the levy rate at the meeting. Several CIP and narrative wording items were left for staff to refine before the packet’s public release, including clarifying construction vs. design entries in the CIP and adding a clearer label for “parks and recreation” in the narrative.

Ending note

Staff said they will revise department narratives and the manager’s prefatory letter, publish the tentative budget and foregone request for public notice, and return to council after the Aug. 14 hearings with any changes for final adoption.