Wasco reviews conservative FY 2026–27 budget as staff flags one-time revenue gains and technology reclassification

Wasco City finance staff on Monday presented a high-level overview of the proposed FY 2026–27 general fund budget, emphasizing conservative revenue estimates and several presentation changes that affect how the city reports operating costs.

Finance presenter Miss Blakemore said the budget projects overall general fund revenues at $18,200,000 and that staff developed projections conservatively "based on current economic conditions and available information." She highlighted two one-time variances in FY25: higher-than-expected vehicle license fee/property tax receipts and substantially increased interest income, both of which will be reflected only after FY25 audit and close-out.

The budget presentation also included a reclassification of technology spending. "Approximately $487,000 of technology-related expenditures are now reflected in operating costs rather than capital outlay," Blakemore said, noting that $304,000 of that total is police software discussed previously. She stressed that the change is a shift in accounting presentation, not additional spending: "It does not increase spending."

Council members asked detailed questions about specific line items and assumptions. Staff noted that, if technology costs were presented separately (as in prior budgets), the conservative budget shortfall would appear smaller (staff presented a $1.4 million conservative deficit including technology as operating costs versus about $931,000 excluding those costs). Blakemore said staff will continue to monitor revenues and expenditures and provide quarterly updates.

On revenues, staff discussed sales tax (including Measure X), a VLF/property-tax 'swap' that produced FY25 receipts higher than originally projected, and interest income that exceeded prior estimates. The presenter said FY25 interest income was recorded at roughly $2.4 million versus a prior budget figure around $495,000; the presenter also noted an $800,000‑ish favorable variance from VLF/property-tax receipts. (The transcript contains a numeric transcription irregularity when reporting the VLF increase; staff committed to providing audited numbers after FY25 close-out.)

On capital projects, the proposed Capital Improvement Program totals about $60 million for the coming year, with staff estimating more than $35 million of that figure would be funded through grants or reimbursements. Blakemore said not every project on the CIP list is expected to move forward in the coming year and committed to producing a prioritized list of projects staff plans to pursue and to delivering quarterly CIP updates.

Staff also said they will convert a server purchase to a CIP item (estimated $250,000), which reduces operating pressures and illustrates how capital-versus-operating classifications affect the operating budget. On a separate policy item, finance will perform an internal review of a $60,000 water-subsidy program to ensure eligibility and guard against oversubscription.

What happens next: staff will finalize FY25 audited results, post the revised fund-balance numbers and bring the budget back for adoption on the council’s scheduled date (staff requested direction to proceed with adoption preparations). The council directed staff to continue preparing the budget for adoption and to provide the additional detail and quarterly updates requested.