Sunset council reviews FY2026 budget, agrees to short‑term transfer to cover shortfall
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Summary
At a April 26 work session in the Sunset Room, council and staff reviewed FY2026 budget numbers showing a projected shortfall and discussed cuts, tax options and transfers; they agreed to pursue a roughly $600,000–$700,000 transfer from public‑works reserves to balance the general fund and to return with firm numbers at the May 5 meeting.
Chair (speaker 1) convened the work session in the Sunset Room on April 26 to review the proposed FY2026 budget and asked Nicole (speaker 2), the staff budget presenter, to walk the council through the numbers.
Nicole told the council she had removed a prior transfer from the fund balance to display the "true" budget and that the revised figures show the city’s total fund balance at 22.63% of the state statutory target, leaving $512,987 going into the new fiscal year. She warned that without changes the FY2027 ending fund balance could be negative 6.9 percent.
Council members examined three main options to close the gap: cut spending, raise taxes through a future truth‑in‑taxation process, or transfer money from the public‑works reserve fund. Nicole said public‑works reserves are substantial—about $2,049,000—and recalled last year’s $900,000 one‑time move of funds into public works.
Members debated personnel costs and cost‑of‑living adjustments. Nicole outlined a prior request for a 5% increase for the mayor and council (about $1,015 plus $80 in FICA) and said wage accounts currently reflect a 4–5% COLA proposal. Some councilors argued for protecting employee pay and recommended a smaller COLA (4% or phased changes); others urged fiscal restraint given the shortfall.
Council discussed recurring liabilities tied to vacation cash‑outs. Nicole said recent calculations show a roughly $32,009.62 increase attributable to vacation buyouts across departments and described how the current policy creates a sizable one‑time pressure on the budget. Members asked staff to consider rewriting the buyout policy to limit future liabilities before budgeting recurring payouts.
Public‑works proposals were folded into the budget discussion: staff (speaker 8) recommended promoting existing crew leads to foreman and assigning additional administrative duties to the operations manager to run stormwater and compliance instead of outsourcing, a move staff said would reduce engineering costs and limit fee increases. Nicole said she would prepare detailed numbers and bring them back for council action.
Faced with the immediate shortfall, Chair (speaker 1) proposed and the council agreed to pursue a transfer of roughly $600,000–$700,000 from the public‑works fund to bring the general fund back to a workable balance (staff noted that, after a transfer, the city would still retain healthy utility and public‑works reserves). Nicole said staff will keep updating account details and return with a tentative budget for formal consideration at the May 5 meeting.
The work session concluded with instructions for staff to produce the cost estimates and policy drafts discussed; the recording ends as the council moves to consider a brief closed session.