Yamhill budget committee approves proposed 2025-26 budget and permanent tax rate after debate over grants, reserves and COLA

The Yamhill Budget Committee on a voice roll call approved a proposed 2025-26 city budget that relies on supplemental transfers and pending grants to start the year with a zero balance, and separately approved the city's permanent tax rate.

Committee members approved the proposed budget after staff presented a revised front-page total and line-item changes that reduced the gap by about $200,000. Karen (staff member) told the committee, "you will notice, first of all, that the budget number on the front page has changed. We're gonna go through the changes that we made here, by roughly $200,000." The committee approved the package by roll call; the meeting record shows the motion passed and the tax rate motion later passed as well.

Why it matters: Committee members said the changes are intended to avoid entering the next fiscal year with a negative general-fund balance. That strategy relies on one-time transfers from reserve funds and on grant awards that have not yet been received, and council members repeatedly cautioned that budgeting for grants before award carries implementation risk.

City staff said the roughly $200,000 adjustment comes mainly from recognizing an economic-development loan and a planned transfer from the police vehicle reserve this fiscal year so the general fund begins the next fiscal year at zero rather than a deficit. Karen said the transfers include contingencies from reserve funds that are currently accounted for in special funds (the administration reserve, city hall reserve and police vehicle reserve) and will be moved into the main general fund by supplemental budget action.

Staff and committee members also discussed including anticipated grant awards in the operating budget so project spending can be planned in advance. Karen and Ross (staff member) described two specific grant items: a Senator Merkley-supported grant for a transmission-line project and FEMA funds for a water tank. Karen said the FEMA money is reflected as a $40,000 line item and that the Merkley award has been included as a placeholder because staff is "waiting for an award letter." Ross confirmed FEMA funds are being released to the state and may eventually trickle down to the city.

Several committee members pressed staff to separate the water-fund transfer that includes FEMA grant money from a larger $75,000 transfer so the record clearly shows what portion is grant-dependent. Karen agreed to separate that $40,000 FEMA placeholder from the rest of the water fund transfer so the committee and public will be able to see the distinction.

Pay and personnel: The draft budget also includes a 3% cost-of-living adjustment (COLA) and step increases for positions budgeted in the general fund. Committee members debated whether COLA should be applied across the board and whether budgeting COLA now creates a public-perception or legal risk after recent layoffs. Ross told the committee the COLA decision is discretionary and not legally mandated, saying, "the cost of living, that you guys award is completely up to you. I don't think there's any legal implications. You can give it to one or give it to all." Several members said their preference is to budget the 3% COLA now so the council has the option to award it later.

Reserves, transfers and timing: Staff described a plan that moves money from multiple reserve funds into the general fund by supplemental budget to balance the books this year; those reserve balances will be shown as beginning balances for audit purposes and cannot be removed from the budget history immediately. Karen explained that some reserve funds must retain placeholder line items for up to three years. She also said the economic-development fund cannot be entirely eliminated this year because personnel costs are still budgeted in that fund.

Projects and grants: Committee members discussed several capital and grant projects: - Sidewalk deposits: Karen said a sidewalk deposit line item of $1,500 was added back to the street fund (with corresponding deposit-refund entries) after it was omitted in an earlier draft. - Transportation System Plan (TSP) grant: Staff said the city will apply for a grant to update the TSP and budgeted a local match of $21,800 if the grant is awarded. If awarded, the city would carry the grant into next fiscal year for project spending. - Third Street sidewalk (Small City Allotment): Committee members reviewed an application for sidewalk and ADA work along Third Street. The meeting record shows an estimated construction cost of about $359,300 and staff said the grant could provide about $250,000; the committee discussed how much the city would need to provide if the grant were awarded and whether SDCs (system development charges) could be used for part of the match. Staff said they would follow up with exact figures and the appropriate fund source.

Public safety and services: Committee members asked about the potential effects if the city shifted policing to a county contract. Greg (police department) explained that some grant-funded resources and fees tied to the city's policing would shift if the city outsourced enforcement to the county; the city could, however, contract with the county for specific services such as deputies focused on city traffic.

Personnel line items and changes: The draft reflects elimination of the city administrator position (which reduces payroll and benefit totals) but retains a three-year placeholder in the budget listing; staff said line-item placeholders must remain in the budget for three years before they can be removed from the published tables. Committee members also asked about overtime and comp time budgeting; staff said overtime lines were reduced in some departments but comp time remains available.

Votes at a glance: The committee recorded two formal actions in the meeting minutes. The budget package as amended was approved by roll-call vote; the record shows the motion passed. The committee then voted to accept the permanent tax rate used to calculate the budget; the minutes record the permanent rate as 0.0037389 and show that motion also passed.

Next steps: Both the proposed budget and the recommended tax rate will be forwarded to the city council for public hearing and final approval. Staff said auditors's final numbers, expected after the annual audit, will provide the final verified beginning balances and may require technical adjustments. Ross told the committee the city will be able to run a preliminary close in July to get an 80–90% view of the actual year-end numbers before auditors complete their work.

The committee's discussion and the adopted draft make clear that the near-term fiscal plan depends on one-time transfers and expected grant awards; several members urged caution and closer monthly tracking once the new budget year begins.