Council reviews budget amendment that adds audit, legal fees tied to federal probe and notes COPIC pilot defunding

Mr. Lewis presented Budget Amendment No. 1 for fiscal year 25/26, saying staff requested updated fund balances from auditors Barnes Dennig to create a baseline for the FY26/27 budget process. The amendment updates fund balances, reallocates vision insurance to a separate line, increases telecommunications expenses, adds capital carryover amounts and includes several additional contractual expenditures.

Mr. Lewis told council the added contractual items include enhanced audit services, advisory services for financial controls, IT, tax compliance and HR risk assessments, and special legal fees to retain outside counsel related to an ongoing federal investigation into alleged revenue diversion. He said the incremental fees are expected to be recouped through insurance or civil litigation if possible.

In a related discussion, city staff and the fire chief explained the COPIC community paramedic program had been a grant‑funded pilot administered as a pass‑through; when the COPIC grant was defunded the two part‑time community paramedic positions ended. The presenters said the program reduced non‑emergent 911 demand and lowered hospital readmissions while it operated, and that the city lacks a current funding source to continue it.

Council members asked for clarification on the COPIC funding and vision insurance reallocation; staff said the vision allocation was separated into its own GL line for tracking and did not increase the overall health fund budget. Mr. Lewis said all updated fund balances are healthy and invited additional questions ahead of the budget workshop.