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Staff warns of tight budget, $20M water project and TIF planning to ease pressure
Summary
City finance staff told the Finance Committee the upcoming budget will prioritize maintenance and existing capital work, identified a $20 million water project and roughly $400,000 in road debt service, and proposed using tax increment financing (TIF) and procurement reforms to align long-term projects with limited near-term capacity.
Staff member summarized the budget outlook at the Finance Committee, saying the city will focus on maintaining existing services and completing projects already underway rather than expanding staffing or launching many new programs. "We're not really looking to increase [staffing]... it's probably gonna be a big increase this year," the staff member said, noting two rounds of department head reviews had already occurred.
The staff member identified several near-term fiscal pressures: an approximately $20,000,000 project tied to the water company, about $400,000 in road-related debt service and mandated union cost increases that will increase personnel costs. "I don't really consider the city to have an undesignated fund balance until we're truly reconciled," the staff member added, urging caution before tapping reserves.
Committee members discussed revenue options to build reserves. The staff member pointed to parking kiosks as a potential nonresident revenue source; he said low-end estimates could generate "2 to $500,000" annually. Members also discussed short-term rental data and registry ideas to better understand housing impacts.
On procurement and long-term savings, staff urged closer review of recurring purchases, vendor lists and bidding practices to find efficiencies over time rather than across-the-board cuts. The staff member recommended stronger procurement tracking and periodic rebidding to capture savings.
The committee also weighed tax increment financing as a multi-year tool to support large capital projects. Staff described options to establish new TIF districts, capture future increment (noting a 58¢-on-the-dollar characterization for eligible uses) and create a TIF subcommittee to link TIF planning with the 10-year capital improvement plan. The staff member said that if a TIF application were approved in time, the committee could realign portions of the current budget to move eligible spending into TIF accounts, but added that approval after July 1 would not affect the current fiscal year's budget.
The meeting ended with no formal votes on budget items; staff and council members agreed to continue the budget work in upcoming meetings and to incorporate procurement, staffing and TIF alignment into further planning.
