College Place council moves emergency reserve and OKs $1.7 million in interfund loans to cover 2025 shortfalls

The College Place City Council on May 12 approved a package of short-term financial moves after staff outlined preliminary 2025 fund balances showing a shortfall in the city’s current-expense account.

Finance presenter Brian told the council the current-expense fund finished 2025 below budgeted expectations, citing a mixture of lower revenues (including delayed or unreceived grant reimbursements and weaker permitting revenue) and higher-than-expected costs such as professional services and legal fees. "We would need a balance of just under $1.5 million" to meet the city's reserve requirement of 17% of prior-year budgeted revenues, Brian said, and the city was roughly a half-million dollars short of that target going into 2026.

To address the shortfall and timing pressures, council authorized the finance director to transfer the 2025 year-end balance in the emergency reserve (Fund 005) into the current-expense fund effective Dec. 31, 2025. Council member Cleveland moved the authorization; Council member Stuckline seconded. The motion passed on a voice vote with all members present voting in favor (Council member Bole was excused).

Council also approved two interfund loan resolutions: Resolution 26-008, a $1,000,000 loan from the wastewater (utility) fund to current expense, and Resolution 26-009, a $700,000 loan from the water fund to the street improvement fund. Staff said about $500,000 of the $1.7 million package is expected to be repaid from grant reimbursements tied to prior project expenses; the loans are described as short-term (roughly two to three years) and carry interest at the city's LGIP rate (roughly 3.8%). Council member Green moved resolution 26-008; Council member Sherman seconded. Resolution 26-009 was moved and seconded on the record and passed by voice vote.

Brian explained some of the largest drivers behind the 2025 variance: approximately $443,000 of permitting revenue the city had budgeted did not materialize; grant reimbursements tied to capital projects were delayed or not received in time to offset year-end expenditures; and several cost categories (police overtime, outside legal services and professional services) exceeded budgeted amounts. He described a timing issue in the street improvement fund where cash-basis accounting shows a $585,000 deficit but staff has about $700,000 in grant receivables that cannot be recognized until cash is received.

Council members asked how the city would prevent similar shortfalls. Council member Cleveland said the city should be more conservative in recognizing development revenue and pushed for timelier financial reporting. Mr. Raburn recommended stronger contract terms and tighter change-order controls to reduce unexpected costs. Brian said staff will complete a new forecast for 2026 by mid-June and revise revenue-recognition assumptions in the 2027 budget process.

The council’s actions are explicitly framed as short-term responses to timing and cash-flow pressures; staff emphasized that several funds (notably the utility funds) remain relatively healthy and that some of the loans are expected to be repaid when pending reimbursements arrive. The council took the votes in open session and adjourned the meeting at 7:01 p.m.

The council approved: the authorization to use Fund 005 emergency reserves to supplement current expense (effective 12/31/2025) and two interfund loan resolutions (26-008 and 26-009) totaling $1.7 million. Staff will return with updated forecasts and variance breakdowns for further review.