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Mt. Vernon reviews tentative 2026-27 budget, flags $30 million rec center bond and tourism fund shortfall
Summary
City leaders presented a tentative FY 2026-27 budget that includes $30 million in bond proceeds for a new recreation center, reconciled larger-than-expected fund balances after audit, and a Tourism Fund deficit the city may cover with a one-time transfer from the General Corporate Fund.
Mayor John Lewis convened a special workshop March 24 where City Manager Nathan McKenna and Finance Director Dan Plumb presented a tentative May 1, 2026–April 30, 2027 budget that front-loads a $30,000,000 recreation center construction expense funded with Home Rule Sales Tax bond proceeds.
McKenna summarized overall reserves in the General Corporate Fund, saying the City expects to end the current fiscal year with a working fund balance near $19.24 million, roughly 11.8 months of operating expenditures, and projects FY 2026-27 revenues of $19,989,830 against $19,562,128 in expenditures, for a modest $427,702 surplus and an expected working balance of $19,412,360.
Finance Director Dan Plumb told the council that reconciliation with the 2024-25 audit changed reported starting balances across multiple funds. The Home Rule Sales Tax Fund in particular now reflects the $30,000,000 bond proceeds earmarked for the Rec Center; budgeted uses from that fund include sidewalk repairs, demolition, fleet leases, police equipment and the Rec Center construction line item.
Officials also disclosed an unexpectedly large deficit in the Tourism Fund after audit reconciliation. Staff reported the fund will end FY 2025-26 with about a $312,666 deficit and projects a $698,299 deficit for FY 2026-27, caused primarily by overestimating hotel/motel tax receipts and grant awards and by relying on incorrect beginning balances. City staff said there was no evidence of fraudulent spending and that the shortfall resulted from prior reconciliation errors; the council discussed a possible one-time transfer from the General Corporate Fund to bring the Tourism Fund balance to zero.
Council Member Donte Moore questioned whether the city ordinance sets a minimum reserve level and contrasted council precedent of holding six to 12 months of operating reserves; McKenna said he would review the ordinance language and report back.
The council was told the budget will be compiled into a summary sheet for review; McKenna said the first reading of the budget ordinance is scheduled for the first April meeting, with a second reading and final vote at the second April meeting. No final budget vote occurred at the workshop.
The meeting adjourned after a motion by Council Member Joe Gliosci and a second from Council Member Jay Tate.
