Oakley council reviews proposed 2026 budget, considers small property tax rate increase to fund maintenance and water projects

Oakley City Council reviewed a proposed 2026 budget Wednesday that would restore the city’s property tax rate to 0.001 and use the roughly $35,000 in additional revenue for building and infrastructure maintenance, city officials said.

Amy (city finance staff) told the council the amended 2025 budget shows the city is close to its projections for revenues and that a proposed increase in the certified tax rate would generate about $35,000 more for the general fund. "We're being conservative in our numbers," Amy said, explaining the city budgets on the low side for revenue and the high side for expenditures to avoid audit problems.

The tax-rate change under discussion would mean an estimated $25 per year increase for the average primary homeowner in Oakley, Amy said. The council reserved a tentative truth-in-taxation hearing date in August (the second Wednesday) so the change can be formally considered; the council must set a tentative date by the June 1 deadline, staff said.

Why it matters: Council members emphasized that the additional revenue would be used for preventive maintenance and capital needs — including routine fixes for aging buildings and targeted public-works items — rather than a major new program. Council members and staff repeatedly framed the proposal as small but useful to keep up with deteriorating facilities.

Key budget details and funding moves - General fund: Amy said 2025 actual general-fund revenues received to date include about $435,000 in property taxes and roughly $330,000 in sales and use taxes; the office noted some revenues and final journal entries still must post before the fiscal year closes. Arena rentals produced about $45,000 in revenue this year; RV pads generated about $39,000. These rental sources were among the largest non-tax income streams. - Transfers: The proposed budgets include a $125,000 transfer from the general fund to the water fund. Council and staff also discussed applying $30,000–$35,000 from the sewer fund to reduce the sewer fund’s outstanding obligation to the water fund; staff said they would pick a firm figure. - Capital improvement fund: As of the presentation, the capital improvement fund balance stands at $4,862,006.43, with roughly $481,000 already assigned or pledged to projects (including prior transfers for the Fransen/Franson Lane road work and master-plan-related work). Staff emphasized that some of those assigned sums are not available for other purposes. - Rodeo and restaurant-tax money: The city has received restaurant-tax money earmarked for rodeo-related capital improvements. Staff said about $260,000 in restaurant-tax receipts will be posted to the city’s 2025 receipts but that the related capital expenditures and accounting transfers have not yet been appropriated in the 2026 proposed budget because details remain unresolved.

Water system, USDA loan and related project costs City staff updated the council on the town’s water project and the expected USDA loan. Amy said the project-cost accounting currently shows just over $4 million in costs to date; the city’s financing plan remains for roughly $4.03 million. "Not all of the costs included in our project cost report are those that will be reported to the USDA," Amy said, noting some engineering and earlier pre-financing costs were incurred in prior fiscal years.

Staff reported the contractor GotDirt still has approximately $500,000 remaining on its contract. Amy said she will meet with a USDA representative next week to discuss funding details and potential additional sources, including emergency funding, and that the exact USDA loan accounting will likely prompt a budget amendment for fiscal 2026.

Humbug chlorination and other infrastructure work The council heard that the Humbug chlorination project (a state-required water treatment project) is roughly halfway complete and that remaining expenses are budgeted for the coming fiscal year. The proposed 2026 budget also includes funding for other water-related needs the presentation identified: bringing an older subdivision line (the Woods Corp area off SR 32/Sorensen Lane) up to current code to support building permits and to reduce repeated service issues, and purchasing another sewer membrane for treatment systems.

Equipment and one-time requests Public works requested a vacuum/truck trailer (a "vac truck") priced at about $88,000. Staff said the purchase could be split between parks, water and sewer if the council chooses to include it; council members discussed exploring a used unit or a shared purchase with nearby entities as alternatives.

Rodeo grounds and facilities The proposed budget includes multiple capital items at the rodeo grounds and arena: a roof recoating of the Red Barn estimated at roughly $30,000, concrete work around the southeast side of the Red Barn, hallway paint for the indoor arena, upgrades to Cattlemen Hall and obligations related to the arena expansion contract language. Council members and staff said they have reorganized the rodeo ledger accounts to improve transparency and to track administrative, production, contractual and concession revenues and expenses separately.

Fireworks and event logistics Staff told the council that the city may need to contract out fireworks production and permitting because the long-time in-house organizer may not continue next year. Amy said the city will check options and potentially arrange a contract for the display.

Council direction and next steps - Tentative truth-in-taxation hearing: council members said they reserved a tentative date for a truth-in-taxation hearing in August (second Wednesday) to allow formal consideration of the rate change and required public notice. - USDA meeting: Amy said she will meet next week with the USDA representative to refine loan and project-cost reporting; council members were told the full USDA accounting will likely require a 2026 budget amendment. - Equipment evaluation: staff and council asked public works to investigate used equipment and interlocal-sharing options for the vac truck before committing to an $88,000 purchase.

Quotes: "We're being conservative in our numbers," Amy said when explaining revenue assumptions and the budgeting approach. "The hit to the average taxpayer is $25 a year," Amy said when describing the proposed tax-rate increase's effect on the typical homeowner.

The council will revisit the proposed budget and the truth-in-taxation schedule at its next regular meeting; staff said they will bring back any needed amendments after discussions with USDA and as final 2025 receipts and entries post.