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City manager warns of $1.6M budget gap; staff proposes fee changes and passing card fees to users
Summary
City manager Joseph told council projected FY2027 revenues will fall about 5.5% while expenditures rise 2.6%, creating a roughly $1.6M shortfall; staff proposed passing credit‑card processing fees to payers and increasing selected permit and activity fees to reduce general‑fund impact.
City manager Joseph briefed the council on the fiscal outlook for FY2027, warning of an estimated $1.6 million gap driven by lower permit and fee revenues and modest expenditure growth. "Looking ahead to the upcoming fiscal year, revenues are projected to decrease by approximately 5.5 due to slower growth, while expenditures are expected to increase by about 2.6% ... That creates a roughly $1,600,000 gap," the city manager said.
Staff highlighted that BDS (building‑development services) permitting revenues are well below projections and that the city has collected about $17.21 million year‑to‑date against a $17.4 million expected figure at the three‑quarter mark. Finance staff recommended a range of policy and fee adjustments to close part of the gap, including shifting convenience credit‑card processing fees to the payer (staff estimated the city absorbs about $40,000–$57,000 per year) and raising select permit fees (zoning, PUDs, special events) and activity center/swim center rates.
Council asked for further detail and impact modeling; staff indicated additional budget sessions and a special meeting on August 3 will focus on tax rates, no‑new‑revenue calculations and policy choices. The council will consider whether to proceed with a planned $850,000 general‑fund transfer to capital reserves in light of projected permit revenue shortfalls.
