Finance committee reviews preliminary FY 25–26 budget; Beach Road project drives near-term capital deficit

Helga Cotter, director of administrative services, presented the city’s preliminary operating and capital budget for fiscal year 25–26 and outlined revenue assumptions, transfers, and capital requests. Staff highlighted a conservative assumption for secured property tax growth and noted building- and planning-related revenues remain below pandemic-era highs; the presentation incorporated the council’s newly adopted fee schedule and phased-in revenue assumptions.

"The proposed budget anticipates total operating revenues of 10,800,000 and total operating expenditures of 10,100,000, resulting in an operating surplus of 718,000," Helga said while walking through the budget slides. She also showed total revenues of $11,400,000 against total expenditures of $14,200,000, producing a projected budget deficit of $2,830,000 — a shortfall staff attributed primarily to the estimated $3,790,000 cost of the Beach Road stabilization project.

Committee members pressed staff on the assumptions behind the projections, the timing of new-fee revenue recognition (staff are phasing recognition so the city does not over-rely on first-year collections), and the plan for reserve replenishment over the forecast period. Staff outlined planned transfers to various reserve and capital accounts, a Section 115 pension trust contribution, and a conservative five-year projection that expects reserves to meet policy targets after the multi-year capital program is completed.

The committee voted unanimously to recommend the tentative budget to council; staff said the draft will go to council on May 12 for review and to the June 9 council meeting for adoption following a public hearing.