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Council approves FY25 budget amendment; staff proposes repurposing downtown escrow to shore up water/sewer CIP
Summary
Council approved an FY25 A3 budget amendment and an adjusted FY25 appropriation tied to the B & B movie‑theater tenant improvements. Staff proposed repurposing $1.2 million of downtown escrow to partially cover urgent water and sewer capital needs while leaving about $200,000 to pre‑wire a future outdoor screen; council members signaled general support and asked staff to include the change in June budget scenarios.
The governing body voted to approve a Fiscal Year 2025 A3 budget amendment and an adjusted fourth‑quarter 2025 appropriation on May 20, formalizing up to $1,325,000 of tenant‑improvement funding tied to the B & B (BNB) movie‑theater project. City staff said BNB submitted an initial reimbursement tranche of $775,000 and that roughly $550,000 remains to be requested in FY26 as the project progresses.
Why it matters: the BNB reimbursements were originally budgeted from ARPA funds; because the developer’s reimbursement timing extended past the ARPA closeout deadline staff reallocated the ARPA‑earmarked funds to other CIP items and are now adding the BNB reimbursement back to the FY25 budget using the general fund's unassigned fund balance mechanism.
Repurposing downtown escrow to address utility CIP shortfalls: in a longer budget work session, the city manager presented multi‑year tax‑rate and enterprise‑fund scenarios (advertised baseline 1¢ real‑estate reduction, optional 1.5¢ and 2¢ reductions) and detailed that the water and sewer capital program faces a material shortfall driven by deferred projects and rising costs. To reduce immediate pressure on the enterprise and general funds, the manager proposed repurposing $1.2 million from a downtown escrow/reserve (money originally set aside for city hall plaza projects including a parking lot and an outdoor screen associated with the theater development) to pay for water/sewer CIP projects now due; roughly $200,000 would remain to install conduit/power infrastructure so a future outdoor screen could be installed without major disruption.
Council reaction and next steps: multiple council members voiced support for preserving the conduit work so an outdoor screen remains feasible while moving the larger $1.2 million to water/sewer capital needs. Several members asked staff to show the precise effect of that one‑time transfer on the enterprise fund deficits and to finalize tax‑rate scenarios and service‑level impacts for the June 3 budget session. Staff said the escrow repurposing would require an ordinance amendment and formal procedures; final numbers and recommendations will be presented at the next budget meeting.
Representative quote: “I’d like to repurpose $1.2 million for water and sewer and keep $200,000 to prep the plaza for a future screen,” the City Manager said, seeking council direction to inform staff prioritization.
Budget votes taken: council approved the FY25 A3 amendment to add up to $1,325,000 in tenant improvements for BNB and approved the adjusted FY25 fourth‑quarter appropriation by voice vote. The proposed repurposing of $1.2 million from downtown escrow for water/sewer CIP was discussed and council generally supported staff continuing to develop that option for formal action.
Ending: Staff will prepare detailed scenarios that show the multi‑year effects on both general and enterprise funds, and will return with the ordinance language to repurpose escrowed funds if the governing body elects to proceed.
