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Council reviews FY27–28 budget plan, considers $3.5M utility-fund payoff to free capital funds
Summary
Councilors discussed Ordinance 07/2026 and a staff proposal to use restricted utility funds to pay roughly $3.5 million in water/sewer debt now to reduce annual debt service and free about $300,000 for capital projects; staff also presented salary adjustments including a $2,500 step and 3% COLA with police starting pay modeled at $60,000.
Councilors spent the largest portion of the workshop reviewing the proposed FY2027–28 operating budget and a staff proposal to reduce utility debt obligations by paying off two loans totaling about $3.5 million.
The Chair said the administration would present a resolution to use restricted utility funds to pay “$3,500,000 of debt service,” which city finance staff said consists of a $3,230,000 infrastructure loan refunding and a $611,097 drinking-water bond. City finance staff (Jim) told the council the drinking-water bond’s annual principal and interest is $224,002.90 and the refunding loan carries about $616,000 a year in principal and interest. The administration said early payoff would reduce annual debt service and free roughly $300,000 for capital projects in the coming fiscal year.
Council members asked about reserves and long-term capital needs, including a deferred water-tower project that staff said likely will require additional borrowing or a major grant. One council member summarized a staff estimate that about $1,640,000 of fund balance could be used to shore up debt-service payments and bridge gaps while preserving operations.
On staffing costs, the administration presented a compensation adjustment that adds $2,500 to step pay scales plus a 3% cost-of-living adjustment; police starting pay was modeled at $60,000 with alternate scenarios at $61,050 and $62,050 to show budget impacts. Councilors said retaining officers and avoiding turnover informed the proposed starting salary increase. The administration said speed-camera revenue is conservatively estimated and earmarked for pedestrian and traffic-safety capital items and a civilian citation-processing position.
Staff and council did not finalize all changes at the workshop; the Chair said a resolution to authorize the debt payoff would be presented if council adopts the budget in June, and staff agreed to provide reserve and scenario data ahead of final action.
