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City finance director flags income‑tax softness; council to file 2027 tax budget
Summary
Finance staff presented the Q1 2026 report showing general fund revenue at about 22% of budget (down ~8% vs. 2025), an ending fund balance near $44 million with a $10 million emergency reserve, and a request to adopt a 2027 tax budget to begin county filing procedures.
Finance Director Bur briefed council and the finance committee on two related fiscal items: a request to adopt the 2027 tax budget for filing with the county budget commission and the city’s quarter‑one 2026 financial report.
On the tax budget, the director asked council to adopt a resolution to set the 2027 tax budget amounts and authorize filing to the county, the statutory step that precedes appropriation and levy determinations later in the year.
Turning to the quarter‑one report, staff reported general fund revenue at roughly 22% of the adopted budget and approximately 8% lower than the same point in 2025. The director attributed the decline to two factors: one‑time revenues in 2025 (a COCCC dividend distribution and a real‑estate tax refund) and softer income‑tax withholding related to employer work‑arrangements. He said permit and construction‑related revenue remains strong.
Expenditures were ~19% of budget for the quarter and, with encumbrances, several capital items remain funded. The reported ending general fund balance is approximately $44 million, including a $10 million emergency reserve (an increase from $9.1 million). Staff will continue monitoring income‑tax trends and said they will recommend corrective budget adjustments only if a persistent downshift in revenue becomes clear.
Council requested follow‑up information on delinquent income‑tax collections that the city’s collection partner (RITA) pursued; staff said they would provide an updated collection summary by email.
What’s next: council will consider the tax‑budget resolution for filing to the county and staff will monitor revenue trends for potential mid‑year adjustments.
