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Finance director warns 2026 budget was unbalanced; city pursuing compliance programs and rental/business registration to capture revenue
Summary
Finance Director Mrs. Stevens Not told the committee the 2026 budget was adopted unbalanced and used about $2 million of reserves; staff described new compliance tools (a non-filer program and subpoena access via a compliance vendor called Rita), increased rental-registration enforcement and business-registration work to recover unclaimed or unpaid local tax dollars.
At the June 22 Budget & Finance meeting, Finance Director Mrs. Stevens Not told committee members that the 2026 budget was adopted unbalanced and that the city has used roughly $2 million from reserves to cover the gap. She warned that, unless spending and revenue realities change, the city will continue to rely on reserves.
"We were $2 million over," she said, summarizing the midyear funding posture and underscoring that the administration would present a midyear assessment and recommended fixes in coming weeks. Staff said a fuller reconciliation will be ready after June close and that administration expects to present more concrete numbers for council planning later in the summer.
Revenue-capture efforts: Stevens Not described a suite of compliance tools the city recently deployed to identify and collect local taxes and fees. She explained a "non-filer" program that identifies wages withheld for residents who have not filed locally and a subpoena/access program used to match filed federal forms to local addresses; those tools help staff find resident obligations, set up payment plans and in some cases pursue offsets through state mechanisms. "The resident has to file to identify that those dollars ... belong to my city," she said, describing the first step that unlocks withholding distributions.
Administration also highlighted stepped-up enforcement of rental-registration requirements, mandatory business registrations tied to permits and better mayor's-court follow-through as near-term ways to increase collections. Committee members asked for more proactive public communications so residents are not surprised when compliance activity increases.
Next steps and calendar: staff will circulate an open purchase-order report and a midyear reconciliation to the committee ahead of the July meeting; the administration recommended a fuller 2027 budget conversation in September after the county issues the estimated revenue certificate. Members asked for earlier, targeted proposals to trim spending in 2026 as a hedge against further reserve drawdown.
