Yamhill budget committee reviews FY 2025–26 proposal after council cuts administrator post to address general-fund shortfall

The City of Yamhill Budget Committee met April 22 and reviewed a proposed fiscal year 2025–26 budget that staff said will balance only if several contingent grants and planned transfers come through and if reserve funds are used to cover a remaining general‑fund gap.

The committee elected its officers, opened and closed the required public hearing on the budget, and agreed to reconvene on May 4 to finalize several outstanding items including cost‑of‑living adjustments (COLA), possible step increases and the timing of transfers from reserve funds.

The session followed recent council action to address a general‑fund shortfall. Meeting materials and staff said the city faced an unanticipated beginning‑balance hit from PERS back contributions and unbudgeted IT and other costs; staff described PERS back payments of roughly $125,000 and unbudgeted IT costs near $70,000, and said those and other items materially reduced the general‑fund beginning balance.

Kara Corrigan, who the committee and council named the budget officer and who presented the document, told the committee the proposal was prepared “in accordance with the best business practices recommended by GAAP…Governmental Accounting Standards Board and GFOA” and with Oregon administrative rules. Corrigan said the proposed budget does not assume a city‑wide cost‑of‑living increase and that the shortfall was concentrated in the general fund; other funds such as water, sewer and streets were described as solvent.

City staff outlined the steps that brought the budget to the committee. Staff said the council and legal advisers discussed three options to close the shortfall and later, at a separate meeting, removed the city administrator as one of the cost‑saving measures being used to balance the general fund. The committee did not itself vote on that personnel action; the removal was described during the meeting as a council decision taken after consultation with legal counsel.

Staff and committee members discussed several revenue and expenditure items that are central to the proposed budget: - All‑fund totals: the packet lists combined budgeted spending for fiscal 2024–25 at about $6.9 million and a proposed all‑fund budget for 2025–26 of about $10.4 million; staff explained the larger figure includes proposed capital projects contingent on grant awards. - Grants and capital projects: staff described a FEMA grant application for a new water holding tank (presented in the packet as roughly a multi‑million dollar project), a Business Oregon funding component intended to reduce the city’s match burden, and a separately named congressional/representative grant (referred to in meeting material as the “Merkley” grant). Staff said FEMA’s administrative portion would include a roughly $90,000 allocation that could be split between water‑fund admin and contract services if the grant is awarded. - General fund specifics: Corrigan said the general fund revenue and expenditures for the coming year are both shown at $925,359 in the draft, that the budget as drafted does not include a city administrator position, and that contingency and reserve transfers were included to cover remaining gaps. - One‑time and unexpected costs: staff identified approximately $125,000 in PERS back contributions and about $70,000 in unbudgeted IT expenses that reduced the prior year ending balance and led to a near‑zero starting general‑fund balance in the draft. - Personnel and police staffing: staff noted a recent police resignation and said removing that position and other adjustments helped reduce the shortfall; police vehicle reserve transfers and the timing of vehicle replacements were discussed at length.

Committee members and staff also discussed several revenue options the council may consider: a proposed $2 per utility account monthly parks fee (presented as generating roughly $12,000 annually), possible increases in the police service fee, and whether to transfer funds from various reserves, including an economic development fund established decades ago. Ross Schulz, a consultant who spoke during the meeting, advised the committee on hearing procedures and on the legal mechanics of interfund loans or transfers; he said a loan from the economic‑development fund back to the general fund could be structured with a payback period and interest if legally permissible.

Several committee members pressed staff on the wage table, step increases and COLA options. Staff said the draft does not budget a COLA or step increases at this time because of the constrained general fund, and that any pay adjustments should be budgeted explicitly (for example, in water or sewer funds) or by transferring utility‑fund resources back into the general fund to cover a city‑wide COLA. Members asked staff to prepare updated salary projections showing the cost of a 2–3 percent COLA and a scenario with step increases; staff agreed to produce those numbers for the follow‑up meeting.

The committee took the following formal steps during the meeting: it elected its officers and approved last year’s committee minutes; it opened and then closed the public hearing on the proposed budget; and it scheduled a follow‑up meeting for Sunday, May 4, at 3:30 p.m. to consider updated salary impact numbers and finalize any planned transfers or contingency uses. No final budget adoption occurred at the April 22 meeting.

The committee and staff emphasized that several large capital projects in the proposed 2025–26 document are contingent on grant awards; if the grants do not come through, staff said, those projects would be deferred and the budget adjusted accordingly. Staff also said they will double‑check legal restrictions before moving any restricted reserve funds into the general fund and will produce a repayment schedule for any interfund loans the committee supports.

The committee reconvened May 4 to consider the supplemental numbers staff promised and to finalize recommendations to council.