Lindon City Council adopts FY2026 budget, sets sewer-fund loan rate and 10-year term

The Lindon City Council on June 16 adopted the city's final fiscal year 2026 budget, approved amendments to the 2025 budget and passed a resolution setting terms for a prior loan from the general fund to the sewer enterprise fund.

The council voted to approve Ordinance 2025-7-O (FY2026 budget adoption) and Resolution 2025-14-R (enterprise fund loan terms) by unanimous voice vote. The loan resolution sets a 4.5% interest rate and a 10-year repayment term to comply with a state requirement that interfund loans use at least the public treasurer's investment fund rate and include a term.

City staff framed the vote as the final budget step before July 1. "This is our final look at the budget to approve it before July 1," a finance staff member said during the hearing. Earlier, the city administrator noted the state requirement for a public hearing on transfers from enterprise funds to the general fund and described the hearing as an opportunity for public comment.

Why it matters: the adopted budget funds operations, personnel step and range adjustments, capital projects and planned debt service. Total proposed revenues for FY2026 were presented at about $36.9 million, with total expenditures shown at roughly $41 million; the difference will be covered by use of fund balance and proposed financing. Major elements highlighted in staff presentations included a proposed $4 million water bond to finish a new well and well house, planned capital road and park work, and an ongoing plan to make extra principal payments on an existing bond tied to the 700 North property.

Key budget and policy details

- Revenues and financing: staff presented total revenues of roughly $36.8'$36.9 million, with $4 million in proposed water bonding and approximately $1.07 million for a fleet lease included in financing lines.

- Utility rate adjustments (proposed for FY2026): water base +5%, water usage +4%; sewer base +7%, sewer usage +10%; stormwater +4%. The presentation noted no proposed change to garbage/recycling rates; the council was told the city plans to absorb outside vendor increases for curbside services.

- Certified tax rate: staff reported the county's certified rate falling from 0.0821 to 0.0788 because of assessed-value adjustments; staff cautioned revenue collection can still be affected by delinquencies.

- Personnel and benefits: the budget includes a 2.6% merit pool and a 2.5% cost-of-living adjustment (2.6% and 2.5% listed in presentations for a combined ~5.1% compensation package). Staff said 17 positions (affecting 23 employees) will be moved to new salary ranges based on a salary study; medical insurance costs were shown increasing ~7.1% with a minor increase in employee contribution (from 3% to 5%).

- Interfund loan cleanup: auditors identified that a sewer-fund loan made at the end of the prior fiscal year lacked an interest rate and repayment term. The council adopted a resolution formalizing a 4.5% interest rate and 10-year term, consistent with the public treasurer's investment fund benchmark cited by staff.

- Other operating changes: staff highlighted a roughly $192,000 year-over-year increase in payments for contracted fire, EMS and dispatch services (Orem) driven by a methodology change in Orem's cost allocation; the council approved covering reduced senior lunch program funding ($~17,000) in the budget.

- Capital and transfers: staff noted $750,000 transfers planned from the general fund to the facilities capital-improvement fund in FY2026 (and a similar amount proposed in the next fiscal year) to support cemetery expansion and other facility needs. Road reconstruction and microsurfacing projects were discussed; staff said the city will bid work in fall for spring 2026 construction.

- Fraud risk and internal controls: staff reported completion of the state's fraud-risk questionnaire with a score placing Lindon in a low-risk band (reported score ~345), and discussed the potential but not immediate need for a formal internal audit function.

Council action and next steps

The council approved the ordinance and resolution by unanimous voice vote. Staff and council members said budget adjustments would continue as needed during the fiscal year; the city typically returns with amendments in October and periodically afterward as projects and actual revenues/expenses warrant.

Votes at a glance

- Ordinance 2025-7-O (FY2026 budget adoption): approved (unanimous). - Resolution 2025-14-R (enterprise loan rate and term for sewer fund): approved (unanimous). - Other items passed at the same meeting (summary): consent agenda and surplus equipment disposition (approved, unanimous); approval of minutes for 06/02/2025 (approved, unanimous); Resolution 2025-13-R renaming a portion of City Center Park to Centennial Park (approved, unanimous); AT&T lease renewal (approved, unanimous); RDA resolution 2025-4-RDA (approved, unanimous).

Ending note: staff said the budget process spanned several months and that adjustments would be made as needed after FY2026 begins on July 1.