City staff recommends voter-approved tax rate and outlines FY2025–26 budget changes

City staff told the Highlands City Council during an Aug. 26 work session that they plan to recommend the voter‑approved tax rate at the Sept. 9 public hearing unless council directs otherwise.

“Our rate is 0.500273…we calculated [the] no‑new‑revenue rate to be 0.480268,” the finance presenter said, adding that the voter‑approved rate including the 3.5% multiplier comes to about 0.55009 and would generate roughly $25,000 in additional revenue and about $4.19 for the average homestead. The presenter said staff will recommend the voter‑approved rate at the next meeting unless the council objects.

Staff reviewed adjustments to the proposed general fund budget since the July 10 presentation: a $100,000 reduction to the streets base budget because concrete panel work was deferred, delay of a two‑year wayside‑horn replacement program, and a $64,500 increase to building/fleet/maintenance for repairs and a barracks lighting replacement. Staff also described a supplemental package totaling $539,612.

Financial projections presented to council showed an estimated FY2025 year‑end fund balance of $11,000,000 (about 47% of current‑year expenditures) and a FY2026 ending fund balance of roughly $8,400,000 (about 32%), with staff noting a projected $2.6 million deficit for FY2026 after supplementals. The presentation highlighted that inflation, contingency and contract turnover had contributed to cost increases and scheduling shifts.

Council members pressed staff on contract timing and vendor transitions for the postponed concrete work and discussed long‑term options to address staffing and recurring personnel costs. The council asked staff to prepare materials for the Sept. 9 meeting and to provide updated estimates if state legislative action changes assumptions about allowable rate increases.