McCall council tentatively approves LOT recommendations and a 3% property tax increase as budget work session closes

The McCall City Council used a budget‑work session to move several FY26 budget actions forward, including a roll‑call approval of the Local Option Tax (LOT) Commission’s recommended FY26 awards and direction to staff on property tax levies and capital project priorities.

At the work session the council voted to "approve the LOT Commission's recommendations for FY26 projects, local option tax funding and authorize the mayor to sign all related LOT tax funding contracts." The roll‑call vote was recorded as unanimous among members present (Council member Nelson: yes; Council member Machesic: yes; Mayor Giles: yes). Council member Grower was recorded absent for the session. The motion authorized the mayor to sign the contracts necessary to implement awards from the LOT commission; staff reminded the council the LOT payout timing will affect cash flow for recipients and that staff will manage payout order and timing in consultation with recipients and finance.

Separately, councilors discussed and then approved a property‑tax strategy for FY26. In a separate motion the council voted to move forward with a 3% property‑tax increase (within the statutory levy limit) and to levy the allowable foregone amount and the Idaho Power recapture to the extent permitted for FY26. The roll call was recorded in the meeting as affirmative by Council member Machesic, Council member Nelson and Mayor Giles; the packet and staff estimates indicated the portion of foregone the city could capture for FY26 was roughly $86,000 (staff noted the final certified value from the county would adjust the number). Council staff cautioned that the city’s consolidated reserves will be drawn down by proposed capital projects and urged a conservative posture given uncertainty in federal and state grant flows.

Councilors also reviewed the capital improvement projects proposed by departments. Staff presented a consolidated view showing the general fund and enterprise fund project requests; after removing non‑spending banking or restricted items the initial general‑fund ask was reduced to roughly $1.11 million of spend that would rely on reserves, with the FY26 operating surplus covering part of that drawdown. Staff and council discussed airport projects (taxiway reconstruction, engineering grants and a planned infield utilities extension), parks, water and public works capital and vehicle rotations. For projects that relied on pending state or federal grants the council gave policy direction: proceed with grant applications and design work but be prepared to pause construction if expected outside grant funds do not arrive.

Ending: Councilors approved the LOT commission recommendations and the property tax direction and instructed finance and department staff to refine the CIP packet for the July budget hearings, flagging several items for potential deferral if outside grants do not materialize.