The Ithaca Urban Renewal Agency on a meeting in August adopted a 2026 budget that limits expense growth to less than 1% while projecting a multi-year operating shortfall, agency staff said. The board adopted the resolution by voice vote; three members said “aye” and there were no recorded dissenting votes.

Agency staff presented a budget that keeps staffing largely intact — including a 3% salary adjustment to stay competitive — and preserves roughly 3.63 full-time equivalent positions. Nelson, the agency staff presenter, said the adopted expense plan assumes modest spending growth and includes $10,000 for consultant work on Inlet Island.

The nut graf: the fiscal pressure is on the revenue side. Nelson told the board the agency is "assuming that we're still looking at a $3,536,000 dollar operating deficit in 2026," and outlined that lower federal CDBG/HOME real-value funding and delays in urban-renewal property dispositions have left a gap between projected revenue and planned expenses.

Nelson walked board members through the agency's account structure and reserves, noting the O5 account (a local, non-CDBG catchall) sits at roughly $490,000 and was about $250,000 six years ago. He cautioned that state public-authorities law limits use of locally controlled funds for making loans or grants unless the enabling legislation authorizes it, so O5 is primarily a source for internal operating or capital actions rather than outward loans.

To narrow the revenue gap, staff recommended pursuing a multi-year memorandum of understanding with the City to reimburse IRA staff time when staff work on joint city-IRA projects, expand income from loan repayments, and continue to pursue selected urban-renewal dispositions or leases that can produce cash returns. Nelson described one recent example of program income: the agency approved a $300,000 HODAG-eligible loan used to convert upper-story office space into affordable rental housing.

Votes at a glance

• Resolution adopting the 2026 IRA budget (start 01:04:39): Motion moved and seconded; voice vote recorded as three ayes, no opposition. Outcome: adopted.

• Resolution renewing the IRA mission statement (start 01:06:25): Motion moved and seconded; voice vote recorded as ayes and no opposition. Outcome: adopted.

The board also corrected a typographical date in the budget resolution during the meeting (the draft listed 2025 and was amended to read 2026).

Board members asked clarifying questions about how long HUD reimbursements take and how the agency tracks accounts. Nelson explained the agency vouches to the City, which draws down HUD funds; reimbursements to the IRA typically occur within about a week because the agency submits drawdowns frequently.

Looking ahead, staff said the IRA could sustain a modest operating deficit for a few years if it pursues a strategy tied to measurable urban-renewal receipts and loan-repayment growth. The board approved the budget and directed staff to continue pursuing the MOU and other revenue strategies.

Ending: The board set its next meeting for Jan. 16, 2026.