Pocatello council approves publication of tentative FY2026 budget, fee schedule and 1% foregone

The Pocatello City Council voted to publish the proposed fiscal year 2026 budget, a tentative fee schedule and a 1% foregone notice after staff presented updated revenue estimates and recommended adjustments.

Anne Nichols, Pocatello chief of staff, and Chantelle Macy, budget manager, told the council the packet reflects changes since the June 10 work session including updated recreation revenue, revised golf capital estimates, removal of expected summer concert-series revenue and corrections to several fee lines. “We did include those in there,” Nichols said referring to cemetery endowment fees that had been omitted in earlier drafts.

The memo also incorporated an updated L2 form from the state that added $94,916 to the city’s operating base (including a $6,532 adjustment for a 3% calculation from three highest-budget years, $72,947 for new construction and $15,437 for a 1% O&M addition), and a Federal Transit Administration (FTA) decision that required the city to increase general-fund expenditures to cover interfund transfers previously recognized as FTA-eligible. Bonnie Schrader of the finance department said staff used an average market return to project interest income and that total projected interest income for FY2026 is $4,988,000.

Council members pressed on several risk areas. Council Member Cheatham and others raised the possibility that water-lease revenue could fall short if reservoirs do not fill; Jeff Mansfield, public works director and city engineer, said the city has included only contracted lease amounts and that, if refunds are required because of shortfalls, the city would use holdbacks from departments and the general fund to cover the difference. Police vehicle replacement and interfund charge increases also drew detailed discussion: the police chief warned large cuts to the department’s operating budget could impair response capacity, and staff said interfund charges (for fleet, IT and administrative support) had increased and will be reviewed further by the new budget analyst.

On the revenue side, staff recommended directing the new L2 increases straight to the general fund rather than pro‑rating them across tax funds; council agreed to take the L2 adjustments, the new-construction addition and the 1% O&M item. Council also directed staff to include an additional $200,000 tied to the South Fifth annexation line item, pending final Board of Equalization (BOE) numbers.

Council President Lyric moved to publish the tentative budget, tentative fee structure, and the 1% foregone for O&M; Council Member Paulson seconded. The motion passed. The council’s direction and the vote clear the documents for the statutorily required newspaper publication and set a public hearing date of Aug. 7 for the budget, fees and foregone notice.

The presentation and the discussion left the general fund balanced using a mix of planned reserve use and the newly available L2 revenue; staff noted the general fund still shows a remaining negative balance on some worksheets that will be covered with $853,504 of approved reserve use and the adjustments the council approved during the session. Nichols told the council staff will publish the documents next week to meet the legal notice timeline and will provide updated figures if the BOE produces revised annexation numbers.

Council members emphasized the fiscal outlook for next year: multiple members warned that rising health‑insurance costs (discussed during the meeting as a major driver of next‑year pressure) and possible interest-rate and revenue changes mean FY2027 may require additional structural decisions. Where council gave direction during the session — such as taking the L2 increases into the general fund, approving modest reserve use now, and removing new community-request increases totaling roughly $31,500 from proposed additions — staff said they will reflect those choices in the published tentative documents.

The council’s vote does not adopt the budget; it authorizes publication and sets the public hearing schedule required by state law.