Auburn council approves midyear budget adjustments, keeps reserves steady

Mayor Kelly Davis presided over the Feb. 23 meeting where the council voted to adopt second-quarter budget adjustments and an updated position-allocation list and pay schedule.

"The action requested is to receive this presentation, but it's also to adopt a resolution to approve three things," said Finance Director Gretchen Hoskins during the midyear financial update, summarizing the requested approvals and background on the 2025–26 budget.

Hoskins told councilmembers the 2025–26 adopted budget was about $37.1 million and that recent audit adjustments left the general fund carryover for the new year lower than earlier estimates. Because of accounting timing under modified-accrual rules, some grant reimbursements that had been expected as 2024–25 carryover now count as current-year revenue, leaving the audited 2024–25 general-fund balance at about $854,000 and an estimated $362,335 unearmarked after the recommended adjustments.

The presentation noted sales tax is the largest ongoing revenue source. "Sales tax is 45% of total general fund ongoing revenues," Hoskins said, adding the city retains an economic-contingency reserve and policies to tap and later replenish reserves if sales-tax receipts fall short of estimates.

Council members pressed staff on forecasts and liabilities. Members asked whether the higher sales‑tax estimate would materialize and how the city would manage pension liabilities; Hoskins said consultants forecast growth but the city will monitor trends quarterly and bring a robust March 9 discussion on options for the unfunded pension liability.

After discussion, a council member moved to approve the midyear adjustments, the updated position-allocation list and the updated pay schedule; another councilmember seconded. The council recorded a roll-call vote and approved the measure unanimously.

The midyear adjustments include 187 line-item changes that largely net to a small overall change in the budget; Hoskins said the recommended package uses roughly $1.3 million of previously identified carryover and leaves the remaining unearmarked amount noted above. Councillors asked staff to provide department-level budget briefings before the larger fiscal-year 2026–27 budget conversation and requested clearer dollar-contexts for potential salary increases.

The council will return to pension‑related policy options on March 9; final proposed budgets for 2026–27 will be presented in June.