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Council reviews FY 2026-27 draft budget, staff flags $654,000 combined shortfall and gas utility compliance risk
Summary
Finance Director Chandra Jasp presented the FY 2026-27 draft budget, identifying a combined budgeted deficit of about $654,000 driven by one-time projects and carryover. Staff noted a $95,000 loss of school-resource-officer revenue and flagged a potential multi-year compliance cost for the gas utility estimated at roughly $1,000,000.
Finance Director Chandra Jasp delivered a detailed presentation of the FY 2026-27 draft budget, describing revenue projections, department requests and one-time items that together produce a combined budgeted shortfall of about $654,000. "We are forecasting really small increases in our property taxes," Jasp said, and staff noted modest sales-tax growth alongside projected one-time expenditures such as council-chamber upgrades and recruitment costs for the city manager and assistant positions.
Jasp highlighted department-level impacts: the police budget reflects the loss of a school-resource-officer (SRO) contract, reducing revenues by roughly $95,000; the police department is otherwise funded similarly to prior years and has used grants to acquire vehicles. Parks and planning items include one-time cash expenditures and a carryover for the general plan update.
Staff characterized the $654,000 as largely attributable to one-time projects and expressed confidence the operational shortfall is modest relative to the overall general fund (staff described it as approximately 1.58% of the operational budget). Councilmembers asked for more line-item detail before adoption and requested clearer ARPA-tracking documents so the public can see past allocations and current balances.
Separately, Public Works staff and other presenters briefed the council on enterprise issues. Acting Public Works Director Eric Edholm and others warned that a recent regulatory designation may make the city a distributor for two large gas users on its transmission line (including the prison and another large industrial user), exposing the gas utility to emissions-credit compliance costs. "Just the run of the numbers right now, we're looking kind of a little bit over 1,000,000 dollars for those 3 years," a staff member said, summarizing the projected multi-year compliance exposure. Staff said they are meeting with state agencies and industry partners to reduce exposure and will update the gas budget as the compliance pathway becomes clearer.
Next steps: Staff will post line-item exhibits and updated risk-management numbers in advance of the council's June adoption meeting; council members requested further detail about event revenue projections and ARPA allocations.
