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Council reviews early FY2026–27 budget: staff proposes SB1 fund and separate wastewater department
Summary
City staff provided an overview of FY2026–27 revenue and accounting changes, proposed a dedicated SB1 gas tax fund and recommended separating wastewater into its own department; staff also described impact fees, fund accounting and plans for expense detail in July.
At a June 16 workshop, finance staff led by Andrea presented an overview of the proposed FY 2026–27 budget and described several structural changes recommended for clearer accounting and long-term planning.
Andrea explained that local governments use fund accounting to keep restricted revenues separate and proposed creating a discrete SB1 gas tax fund in response to audit guidance. She also recommended moving wastewater out of Public Works and making it its own department so wastewater revenue and capital can be tracked transparently; staff emphasized that wastewater and tertiary funds must remain separate and that wastewater rate revenue cannot be used for tertiary operations.
Andrea demonstrated an automated extraction from the city's financial system (Cassell) that produced updated revenue actuals and highlighted areas where revenues exceeded expectations (pool, arena) or fell short (construction permits and some impact fees). She described ongoing work on an impact-fee study with DTA and a developer-deposit reconciliation for recent subdivisions.
Council members praised the clearer reporting and asked staff to return with expense details in July and to continue reconciling interfund loans and historical entries. Staff said it will bring expense proposals to the July 7 meeting and may request a special meeting to adopt the budget in late July or early August.
Public commenters thanked staff for the work and asked clarifying questions about the school-owned pool and golf-course contract terms; staff clarified the city covers pool operations (approximately $100,000/year) and that the golf-course contract includes annual water payments under the current agreement.
