Council reviews Measure I budget plan; staff proposes public-safety hires and $3 million for housing over two years as public calls for more funding

City Administrator staff presented the city administrator’s recommended two-year financial plan and the fiscal year 2026 operating and capital budget, telling the City Council that the first full year of Measure I revenue is projected at about $15.1 million for FY 2026 and $15.5 million for FY 2027.

The Measure I proposal shown to council would direct the bulk of the new sales-tax revenue to maintain existing services. Staff proposed funding 34 police positions, 19 firefighter positions, eight parks and recreation positions (including after-school support), and four librarian positions plus one library technician and expanded digital and security services. In addition, staff proposed two transfers each year of $1.5 million: one transfer to a housing/homeless services fund and one transfer to a newly created local housing trust fund intended for capital housing projects, giving council discretion over future appropriations.

City finance director Keith DeMartini and budget manager Natalia Glusack led the presentation and said the Measure I revenues free the city from having to make deeper cuts to core services. The proposal also included a reorganization that would move housing and human services and much of downtown parking into the city administrator’s office and add a deputy city administrator position to oversee those groups.

Why it matters: the plan is an early step in the FY 2026 budget process leading to formal budget deliberations in June and final adoption June 17. Measure I revenue is the principal reason staff said the city can avoid layoffs and restore staff or services previously reduced.

Details and implementations - Measure I revenue forecast: $15.1 million in FY 2026 and about $15.5 million in FY 2027 (staff projection shown at the hearing). - Proposed uses described by staff: restore and continue funding for existing positions in police, fire, parks & recreation and library; five homeless-service contracts with uncertain future federal funds would be supported; and two recurring transfers of $1.5 million per year into (a) a housing and homeless services fund and (b) a local housing trust fund for capital housing projects. - Downtown parking: staff proposed a two-phase stabilization plan (phase 1: operational tune-ups, pilot pay-by-foot on the Helena lot, lowered commuter permit prices in Ortega Garage; phase 2: rebalance system and affordability measures). Downtown parking will move under the city administrator’s office as part of the reorganization. - Citywide budget posture: staff said tax revenue growth is softening, pensions and benefit costs are rising, and the city is prioritizing delivering existing capital projects before adding new ones.

Public comment and reactions During the public-comment period on the budget, several housing advocates and community groups urged a larger, dedicated local housing trust-fund allocation. Speakers representing CLUE and other housing advocates asked the council to allocate $5 million per year to the local housing trust fund so shovel-ready projects could compete for additional outside funding and tax-credit pipelines. League of Women Voters and labor representatives also urged stronger investment in affordable housing and timely implementation of the city’s classification and compensation study to retain staff.

Council and staff questions covered: how flexible the $1.5 million transfers are, whether federal HOME and CDBG funds are at risk, how Measure I dollars were classified between existing services and new allocations, staffing vacancy counts (police had vacancies staff said they were actively recruiting to refill), and whether parking-lot redevelopment work would require capital reserves.

Votes at a glance (consent calendar related to the budget meeting) - The council moved and approved the balance of the consent calendar (items 4, 6, 7, 8 described on the record) by motion; item 5 (police foundation donation) was pulled for comment and later approved separately. (See Actions below for motion text and movers.)

Discussion vs. decisions - Discussion only: the two-year financial plan and Measure I allocations were presented for council review (staff requested that council "hear a report" on the recommended plan); staff characterized the item as non-action (presentation) today and indicated final budget adoption is scheduled for June 17. Many line-item decisions and any appropriation changes will occur at budget deliberations. - Direction requested of staff: multiple council members asked staff to return with additional detail (for example, reserves projections and options for how to increase housing trust-fund allocations). Staff said some items (e.g., fee studies, reserve discussions) could be scheduled with finance committee or at upcoming workshops.

Ending: staff will bring budget deliberations to council in June, including a rate-and-priorities workshop and the formal adoption hearing on June 17. Meanwhile public commenters and some council members urged staff to identify additional, recurring resources to increase the local housing trust fund beyond the staff-proposed $1.5 million per year transfer.