Committee advances budget adjustments, shifts neighborhood infrastructure funding into CIP and eyes $25M bond

The Special Committee on Ways and Means on June 10 reviewed final budget adjustments and agreed to reclassify neighborhood infrastructure funding from the operating budget into the capital improvement program (CIP) while staff outlined options for a prospective bond issue to help pay for neighborhood projects.

"We will have a total levy of $418,954,285," the committee presenter said, noting that figure is about $500,000 lower than last year and reflects an additional $696,692 in revenue. The presenter said the budget includes a $734,916 real-estate tax revenue pickup and a $1,105,123 loss in tangible personal property tax revenue tied to a specific tax case.

Committee members pressed staff on how the city would fund neighborhood infrastructure (NIF) going forward. Staff said NIF projects are capital in nature — spanning multiple fiscal years — and recommended moving NIF allocations into the capital budget to improve accounting and project transparency. "It is cleaner this year in a solution this year to move it out of the operating budget and into the capital budget," the presenter said.

Chair Miguel Sanchez emphasized his commitment to NIF funding. "I'm never gonna approve a budget, as long as I'm a city councilor that doesn't include NIF funds," he said, adding that the council retains the power to return funds to general revenue in future years if circumstances change.

To fund additional neighborhood projects, staff described two options: (1) increase the bond principal by $1,500,000 or (2) use bond premium generated from a larger bond sale. Staff estimated a typical bond premium around 10% on a $25,000,000 issue (roughly $2,500,000 in premium), and said the city would consult investment advisers on debt-protection and pricing before finalizing the amount. "If we do a $25,000,000 bond issue, we will have probably likely $2,500,000 in bond premium to use towards additional projects," the presenter said. The presenter added that the annual debt service on a $25,000,000 issuance was roughly $780,000 per year in the presented scenario.

Staff also described how the city would manage cashflow if bond proceeds are not yet received: the city could pay expenditures from the general fund within a reimbursement window and then be reimbursed from bond proceeds once the bond closes, giving practical access to funds ahead of a completed sale.

The budget adjustments include new and reconfigured positions (for example, an energy administrative assistant and a policy and communication manager), a $250,000 market adjustment for utilities and capital needs, $50,000 to veteran housing services, $25,000 for additional recreation programming, and $80,000 to support public-safety operations. Offsets cited in the presentation include roughly $340,000 removed from police salary lines to reflect officer attrition and approximately $336,000 in staffing-level adjustments that together yielded about $300,000 in savings for the final budget.

Committee members asked for caution about adding long-term commitments without clear borrowing capacity. One member said she was "hesitant" to commit to $1.5 million on a bond until the committee had more detail about levy projections and borrowing power. Staff replied they had included a $25,000,000 bond in debt projections and would return with a resolution specifying the bond amount and timing.

On program-specific items, staff reported a non-dollar edit changing the library line description from "library infrastructure" to "community library infrastructure" to clarify the intended beneficiaries. The presenter said the final CIP grand total in the plan is $26,500,000 for the 2027 plan, with neighborhood infrastructure included.

Committee members and the chair also discussed a $225,000 direct grant included in the budget intended to support extended hours at two libraries and encouraged coordination with the school district and City Year to structure services. Chair Sanchez noted that the school district would receive nearly $78,000,000 in additional state aid, which will affect district budgeting and potential city-district agreements.

The committee approved several routine procedural motions at the start of the meeting (motions to substitute agenda items 1–5 and to enter Exhibit 1), each carried by voice vote.

What happens next: staff said they plan to begin bond planning as soon as the committee completes its hearings; a resolution specifying the bond amount and timing will return to the council when those decisions are finalized.

Votes at a glance • Motion to substitute item 1 — motion made by Vice Chair Taylor, seconded by Councilwoman Graves; outcome: approved (voice vote, ayes). • Motion to substitute item 2 — seconded by Vice Chair Taylor; outcome: approved (voice vote, ayes). • Motion to substitute item 3 — motion made by Vice Chair Taylor, seconded by Councilor Davidson; outcome: approved (voice vote, ayes). • Motion to substitute item 4 — motion made by Vice Chair Taylor, seconded by Johnson Williamson; outcome: approved (voice vote, ayes). • Motion to substitute item 5 — motion made by Council (transcript: "made by counsel and greet"), seconded by Vice Chair Taylor; outcome: approved (voice vote, ayes). • Motion to enter Exhibit 1 — moved and approved by voice.

Sources and provenance: committee presentation and discussion, topic introduced at SEG 095 and last substantial discussion recorded through SEG 887 (see timeline entries).