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City projects $100,000–$150,000 budget shortfall; council weighs rate increases, levies and asset sales
Summary
At a May 11 work session, C.A. Fiorelli said the city faces a projected $100,000–$150,000 deficit if all capital requests are approved, noting the city is at its maximum permanent property tax authority and listing options including utility rate increases, local levies (voter approval required), bonds, grants and potential property sales.
C.A. Fiorelli provided an overview of the city’s fiscal position at the May 11 City Council work session, saying the current property tax rate is $3.5566 per $1,000 assessed value and that the city is already at its maximum permanent tax authority. Fiorelli told council that state limits—Measures 5, 47 and 50—constrain revenue growth while rising maintenance and operating costs driven by aging infrastructure are increasing budget pressure.
The overview framed a projected shortfall of roughly $100,000–$150,000 if the city funds all capital requests in the next budget year. Staff told the council that Public Works has been asked to prioritize capital needs to help close that gap. The draft budget will be released May 19, 2026, and the first Budget Committee meeting is scheduled for May 26, 2026.
City staff and council discussed several potential ways to raise or reprioritize funds. Operational options listed by staff included raising utility rates or franchise fees, supporting economic growth to expand the tax base, and restructuring services at the departmental level. Officials emphasized that local levies and some other revenue mechanisms would require voter approval. For capital needs, staff identified state and federal grants, bonds (which would require voter approval), and urban renewal as principal options.
Council also discussed using proceeds from the sale of city-owned property as a potential future funding source. Fiorelli noted some properties have been discussed previously as reserved for water infrastructure, and recommended keeping property sales as an option because those parcels are “most likely would not be required for current budget” needs, according to the minutes.
Why it matters: the city’s ability to respond to aging infrastructure and rising operational costs is limited by state-imposed tax caps, making trade-offs—between rate increases, voter-approved levies, borrowing and asset sales—likely in the coming budget cycle. The next formal steps are the budget release on May 19 and the Budget Committee meeting on May 26, when council and staff will consider prioritized capital requests and funding scenarios.
