Moses Lake presents 2026 budget priorities; audit catch-up and ARPA spending highlighted

Moses Lake city staff presented the fourth and final budget workshop for the proposed 2026 budget, highlighting an audit catch-up plan, an ongoing ERP implementation, proposed transfers to reserves, and a schedule of upcoming public hearings.

Debbie, the finance presenter, told the council the finance department is working with an outside consultant to convert the city9s financials from GAAP to cash basis to simplify and accelerate scheduled audits for 202293 2024. She said the conversion is expected to reduce audit costs and allow the city to file those years quickly with auditors once the conversion is complete. "As soon as that is done, then we should be able to quickly roll into reporting those financials to the auditors," Debbie said.

Staff also outlined plans to resume the Tyler Technologies ERP implementation (financials, HR and payroll) in early 2026, with the goal of completing the financials portion by October 2026 and HR/payroll going live in January 2027. Utility billing implementation is underway, with a planned 2027 go-live for that module.

Budget highlights and proposals:

- Finance: Proposed revenues in the finance budget were shown at $1,350,280 with expenses of $1,894,001.74; staff plan a six-year financial sustainability forecast and public-engagement tools (BalancingAct) to involve residents in budget choices.

- Audits: Conversion from GAAP to cash basis was presented as the primary strategy to catch up on late audits and reduce future audit costs (staff estimated audit-cost savings of $40,000 to $60,000 annually after conversion).

- Rainy day fund: The city transferred $500,000 to a rainy day fund in July 2025 and proposes an additional $250,000 transfer in 2026. Staff recommended council set a target level for the rainy-day fund as part of the upcoming financial sustainability review.

- ARPA: Staff said remaining ARPA funds must be spent in 2026; roughly $1.4 million remained earmarked for 2026 uses, including personnel in technology services and general fund support. Any unspent 2025 ARPA allocations will be carried into 2026 via budget amendment.

- Opioid-abatement funds: The city coordinated with Grant County to pool opioid-abatement allotments for several projects, including an all-wheel-drive vehicle for outreach, a 0.4 FTE recovery coach, jail lockboxes and canine/jail outreach equipment. Staff will bring a budget amendment to reconcile payments that crossed fiscal-year boundaries.

- DMLA/Main Street: Staff recommended increasing the city9s contribution to the DMLA Main Street tax-credit program from $50,000 to $250,000 to leverage the maximum match; the council discussed strict contract terms to ensure funds would be used for physical downtown improvements.

- Human services: General-fund human services allocation proposed to fall from $115,000 to $92,000 with an application process for distribution and council review in Q1 2026.

- Legal budget: City attorney requested an increase in the hourly rate for work beyond the monthly 25-hour flat rate; staff noted the city routinely exceeds the 25-hour block.

- Transportation Benefit District: Staff clarified the TBD does not expire until 2027; council will consider renewal at a future date to preserve street-project funding.

- Sanitation and recycling: Staff reported the sanitation fund remains healthy and no rate increase is planned for 2026. Recycling operations, however, continue to incur net costs; staff will provide detailed monthly data on recycling revenues and disposal costs.

Timeline and process: staff confirmed a public hearing on the budget and property tax resolution the following Wednesday and a target budget adoption two weeks later. The property-tax resolution will include two options: one that does not take the 1% statutory increase and one that does. The proposed budget assumes not taking the 1% increase; staff recommended "banking" the capacity if council opts not to take the increase.

Next steps: staff will finalize adjustments (including the Moses Lake library square footage decision the council discussed earlier), prepare the public hearing materials, and return with the audit/conversion schedule and the financial sustainability consultant plan for council direction.