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Council reviews FY2026 budget package: $135.9M plan, $31M bond cap, fund-balance use and staffing discussions
Summary
Staff presented a proposed FY2026 budget with $135,911,380 in projected revenues (an increase of about $30.6M tied largely to a proposed bond), proposed use of fund balance ($5M general fund; $4M nursing-home fund), capital priorities including Zephyr Park and a water meter replacement program, and council discussion on employee pay increases and adding positions like a parks director or city engineer.
City staff presented a detailed FY2026 budget workshop on Aug. 11, 2025, showing total projected revenues and expenditures at $135,911,380—roughly $30.6 million higher than last year, a change staff linked to the proposed bond financing and related capital projects.
Finance staff and the financial adviser walked the council through the major components: a bond package not to exceed $31,000,000 (the estimated financed amount for listed projects is about $27,700,000), an intended use of fund balance of $5,000,000 from the general fund and $4,000,000 from the nursing-home fund, and capital projects including a $16 million Zephyr Park allocation and an unexpected $150,000 replacement of the library's air conditioner. The presentation also outlined a multi-year water meter replacement program—$1.7 million per year over three years—to replace approximately 10,000 meters.
Council discussed employee pay proposals. Staff presented the cost per 1% across funds (roughly $110,069 per 1% across all funds) and indicated a placeholder 5% increase in the draft; several members favored a higher figure. After discussion, council signaled a working consensus around 6% as an appropriate placeholder for the upcoming budget (staff said department heads could find the marginal dollars if council directed an added 1%). Council also debated adopting a merit-based component to future raises and discussed timing of increases (single increase vs. split across the fiscal year).
Other topics included sanitation equipment and recycling carts (new automated 65-gallon recycling carts), continued investment in stormwater assessment and improvements, and potential new positions such as a parks director and an in-house city engineer (council asked staff to draft job descriptions and noted contingency funds could be reallocated to start positions later in the fiscal year if justified). Staff asked whether council wanted another workshop before the September readings; council asked for a short follow-up meeting focused on changes and clarifications.
