AGENDA CAPTION:
Title
Receive a Staff presentation and hold a Public Hearing to receive comments for or against Ordinance 2025-36, adopting an operating budget in the amount of $371,102,562.00 for the fiscal year beginning October 1, 2025 and ending September 30, 2026; authorizing certain adjustments to the budget with the approval of the City Manager; approving fiscal year 2025-2026 Capital Improvements Program Projects in the amount of $114,815,000.00; including procedural provisions; and declaring an effective date; and consider approval of Ordinance 2025-36 on the first of two readings.
Body
Meeting date: September 2, 2025
Department: Finance
Amount & Source of Funding
Funds Required: N/A
Account Number: N/A
Funds Available: N/A
Account Name: N/A
Fiscal Note:
Prior Council Action: City Council Strategic Planning and Visioning on January 30-31, 2025, Budget Policy Workshop on February 27, 2025, Budget Policy Adoption on March 18, 2025 (Resolution 2025-53), Budget Workshops on May 20, 2025 and June 26, 2025.
City Council Strategic Initiative: [Please select from the dropdown menu below]
Public Safety, Core Services & Fiscal Excellence
Quality of Life & Sense of Place
Choose an item.
Comprehensive Plan Element (s): [Please select the Plan element(s) and Goal # from dropdown menu below]
☒ Economic Development - Choose an item.
☐ Environment & Resource Protection - Choose an item.
☐ Land Use - Choose an item.
☐ Neighborhoods & Housing - Choose an item.
☐ Parks, Public Spaces & Facilities - Choose an item.
☐ Transportation - Choose an item.
☒ Core Services
☐ Not Applicable
Master Plan: [Please select the corresponding Master Plan from the dropdown menu below (if applicable)]
Choose an item.
Background Information:
The Fiscal Year 2026 operating budget totals $371,102,562.00, which is a $28.5 million or 8.3% increase from the adopted budget for Fiscal Year 2025. The budget is balanced and meets the criteria set forth in the City’s Budget Policy Statement. The Capital Improvement Program for Fiscal Year 2026 totals $114,815,000.00.
City Council held a Visioning workshop in January where they refined their strategic goals and prioritized programs and services. A Budget Policy workshop was held in February to formulate the Budget Policy that was adopted in March. The strategic goals and Budget Policy established by City Council were used to create the proposed Fiscal Year 2026 budget, which was presented to City Council during budget workshops in May and June.
Revenue Summary
This budget, as submitted, proposed to raise the tax rate to 62.78. During the last budget workshop current and future needs were discussed that cannot be met with the No-New-Revenue rate of 62.78. Passed and pending state legislation would severely hinder the City’s ability to raise the tax rate to address these needs in the future. City Council adopted the maximum proposed tax rate of 67.69 cents per $100 valuation.
The tax rate is comprised of two components, 1) operations and 2) debt. The operations component of the tax rate is 51.22 cents and the debt component is 16.47 cents. In 2022, City Council approved a local homestead property tax exemption of $15 thousand and increased the local senior and disabled property tax exemption by $10 thousand to $35 thousand. In Fiscal Year 2026, these local property exemption amounts remained the same and provided residents with $1.6 million in property tax relief.
The proposed budget also includes recommendations from the Citizen Utility Advisory Board (CUAB) for Water and Wastewater rates and Electric base rates. CUAB recommended a minimum 4.4% effective rate adjustment for electric services and a 10.4% effective rate for water-wastewater, with a 10.8% rate adjustment for water and 9.7% for wastewater services. Resource Recovery rates will increase 1% for services. These Resource Recovery rate adjustments are proposed for residential and multifamily services.
The proposed rate and fee adjustments will be considered separately by City Council and a separate public hearing will be held for each.
Expense Summary
Public Safety, Core Services, and Fiscal Excellence is one of City Council’s strategic goals. Supporting this goal, the proposed budget includes 947.08 full-time equivalents (FTEs). This is an increase of 6.62 FTEs from the authorized 2025 total.
The following 5 positions were added in the General Fund:
• 1.5 FTE Court Bailiff
• 1 FTE Economic Development Specialist*
• 1 FTE Public Works Administrative Coordinator*
• 0.125 FTE GIS Intern*
*Positions added due to departments reducing their operating expenses or increasing revenues (budget neutral).
The following funds have positions added:
• Hotel Occupancy Tax – 1.0
• Electric – 1.0
• Water/Wastewater – 1.0
The budget also includes a 3% increase for a cost-of-living adjustment for non-civil service employees. The Police and Fire Meet and Confer Agreements were approved during Fiscal Year 2023 and the agreed upon compensation adjustments are included in the proposed Fiscal Year 2026 budget.
Council Committee, Board/Commission Action:
The Citizen Utility Advisory Board held multiple meeting and voted to recommend a minimum 4.4% effective rate adjustment for electric services and a 10.4% effective rate adjustment for water-wastewater, with a 10.8% rate adjustment for water and 9.7% for wastewater services.
Alternatives:
City Council may adopt the budget as presented or make changes as deemed necessary.
Recommendation:
City Council approve the ordinance adopting the Fiscal Year 2026 Annual Budget and Capital Improvement Program.