Committee hears long budget briefing: audit corrections, HB 96 compliance, ARPA/CDBG options and five pending labor contracts

City finance staff presented an extended briefing on Nov. 5 covering outstanding audit entries, revenue and expenditure timing issues and the 2026 budgeting process.

Miss Stevens Knott, presenting monthly finance reports, said the city received county funds for the second half of the year, but that some 2024 expenses were posted in 2025, creating accounting anomalies (including a waste collection fund described as "upside down") that require auditor guidance and possibly audit adjustments. She asked members to allow time for auditors to direct corrective entries rather than having staff make unilateral year‑end changes.

The committee discussed the need to finalize five labor contracts this year (including firefighters and police), the potential cost impacts of those contracts, and the city’s constrained revenue outlook. Stevens Knott urged members to read HB 96 (cybersecurity mandates) and said the auditor expects municipalities to be moving toward compliance; the city is negotiating vendor contracts to support HB 96 work.

Members also debated remaining ARPA funds and whether the city can use them — or CDBG dollars — to abate a city building’s asbestos and mold issues. Staff said CDBG can support abatement only as part of rehabilitation that restores property value, and cautioned that removing mold without fixing the roof or water intrusion may cause recurrence. Stevens Knott said ARPA has restrictions and cannot simply be used as a rainy‑day fund; any use must meet programmatic goals (pandemic‑recovery and community rehab).

Committee members requested versioned budget files, outstanding check reports and fund balances for review, and agreed to a special budget meeting to review the 2026 proposed budget and supporting documents. Several members asked staff for a one‑on‑one walkthrough of the packet to improve understanding before council votes.