Council reviews tentative 2025–26 budget; Orchard Drive stormwater estimate and capital reserves unsettled

River Heights councilors reviewed an updated draft of the 2025–26 tentative budget on June 3 and discussed several capital and stormwater funding items that remain unresolved. Staff said the general fund now shows a transfer to the capital projects fund of about $20,920, which has been placed in reserves and is not yet allocated to any specific projects.

Council and staff discussed the Orchard Drive stormwater project. Staff provided a working estimate of roughly $76,000 for the work; council members discussed funding options including allocating about $30,000 from stormwater reserves and covering the remaining cost with an interfund loan from the water or sewer fund, to be repaid by stormwater. Staff asked for direction on whether to include the stormwater project in the budget and on the preferred source of any needed loan.

Other budget items discussed: wrap grant revenues for a new park pavilion need an update (the council received $50,000 from the wraps grant this cycle rather than the $120,000 originally sought); some population‑based park grant revenue was not yet posted and staff will research it; the city maintains placeholder $1 entries for impact fees where future development could generate fees but no reliable revenue is budgeted; and the council plans two public hearings in mid‑June to amend the current year budget and to approve a tentative budget, with final adoption scheduled after a truth‑in‑taxation hearing in August.

Councilors characterized the near‑term fiscal outlook as tight. Staff said modest additional revenue is possible from the old school property and other items, but not at a scale to fund multiple large capital projects without using reserves or interfund borrowing. Council asked staff to return with funding scenarios and options before the June public hearings.