Council debates FY 2026 budget: equalization, lodging-tax options and spending concerns

City staff led an extended work-session briefing on the proposed FY 2026 budget and options for offsetting a potential real-estate tax equalization; council debated lodging-tax increases, ambulance-billing changes, non-personnel spending and the capital program.

Deputy City Manager Greg and Chief Financial Officer Donna Witt summarized why the city faces a different revenue picture than it did in 2024. Staff noted that strategies used to close earlier budget gaps (one-time funding for vehicle replacement, assumed vacancy savings and removing a debt-service reserve) were largely one-time moves and cannot be repeated. They also said consumption-tax revenue that provided roughly $6.5 million in new revenue two years ago is flat to negative now.

Staff presented equalization figures and options. They said the value of one real-property tax penny is roughly $907,148 and that the “equalized” rate calculated over two reassessment cycles is about 80.8¢ per $100 of assessed value. Staff said maintaining the proposed level of services would require roughly 5.9¢ to cover a general wage adjustment for non-sworn staff and related progression costs; additional cents were described to cover a…