Subject
title
Adoption of an Ordinance to amend Ordinance No. 2A-26 to appropriate funds and levy taxes for FY 2026 (Budget Amendment #4)
end
Department
Finance
Recommendation
In accordance with the City Charter, since the budget ordinance is adopted at the fund level, a change in the appropriated amount of any fund requires action by the Mayor and Council. The vehicle for such action is an amendment to the budget ordinance. The proposed ordinance, Attachment 1, would amend the FY 2026 budget. The FY 2026 budget was adopted by the Mayor and Council on May 5, 2025, and amended three times on August 4, 2025, November 10, 2025, and March 9, 2026.
If the Mayor and Council wish to proceed with adoption of the ordinance at the same meeting, the ordinance should first be introduced and then a motion should be made to waive the layover period. If the motion to waive the layover period is approved by an affirmative vote of six or more members of the Mayor and Council, a motion to adopt the ordinance may then proceed.
Discussion
The proposed ordinance, Attachment 1, would amend the FY 2026 budget. This amendment recognizes the items that are described in this agenda report and detailed on Attachment 2. The 3Q FY 2026 Financial Report is included as Attachment 3.
General Fund
• Increase Transfer to the Capital Improvements Program (CIP), $4 million expenditure increase: As previewed in the FY 2027 Proposed Budget document and budget worksessions, staff recommends utilizing $4 million in unassigned General Fund reserves above the reserve target to support the planned FY 2027 through FY 2031 CIP budget. This funding does not increase the current Capital Projects Fund appropriation, but is assumed in the adopted CIP to support projects through the end of the five-year planning period.
• Redlight Camera Program, $463,800 revenue and $314,250 expenditure increase: The number of redlight camera citations issued has exceeded budgeted estimates. Because the city pays its redlight camera program operator on a per issued citation basis, this increase results in additional costs for the program, which are fully offset by program revenue.
• Senior Center Personal Training Program, $40,000 revenue and expenditure increase: Personal training sessions at the Senior Center have exceeded budgeted estimates. To support this increased demand the Senior Center needs an additional $40,000 to cover temporary employee wages associated with personal trainers, which will be fully offset by additional revenue from seniors paying for these sessions.
• Swim and Fitness Center Programming, $32,300 revenue and expenditure increase: Swim and Fitness Center program participation has exceeded budgeted estimates, resulting in a need for additional temporary wages to accommodate program demand. This increase is fully offset by additional revenue from program fees and swim team dues.
• Lease and SBITA adjustment, $2.4 million revenue and expenditure increase: This administrative adjustment allows for the GASB-compliant recording of long-term leases, lease purchase agreements, and subscription-based IT arrangements (SBITAs).
Special Activities Fund
• Senior Assistance Fund, $7,000 expenditure increase: Additional funding is needed to support current demand, supported by the program’s fund balance.
• Housing Opportunities Fund, $190,000 expenditure increase: Additional funding is needed to provide down payment assistance for planned closings through June 30, supported by the program’s fund balance.
• Art in Public Places Program, $3,700 revenue and $9,700 expenditure increase: Additional funding is needed to support planned work due to increased costs. This increase is supported by a $3,700 developer contribution and $6,000 of the program’s fund balance.
Water Fund
• Depreciation, $728,280 expense increase: Actual depreciation charges exceed budgeted estimates for the Water Fund for FY 2026.
• Arbitrage, $50,540 expense increase: Project delays have resulted in a slower spend-down rate than projected for recent bond proceeds. Because the bond proceeds have been earning more in investment income than the yield paid to bondholders, the city is required to repay this excess amount to the IRS.
• Replenish Contingency, $65,000 expense increase: Water main breaks and increased costs have contributed to a higher than typical draw on contingency funds in FY 2026. To ensure emergency funds are available for year-end needs this funding will restore Water Fund contingency to its adopted level.
Sewer Fund
• Blue Plains Operating Costs, $400,150 expense increase: Additional funding is needed to cover this year’s settlement charge for operating costs at the Blue Plains Advanced Wastewater Treatment Plant. Throughout the year, the city is billed based on estimated usage. The following year, the city receives a settlement bill that adjusts those estimates to reflect actual usage and costs. Depending on the difference between estimated and actual costs, the settlement may result in either a credit or an additional payment. It is important to note that this settlement charge is based on FY 2025 actual usage, and is not related to or impacted by the Potomac Interceptor spill.
• Depreciation, $245,000 expense increase: Actual depreciation charges exceed budgeted estimates for the Sewer Fund for FY 2026.
3Q FY 2026 Financial Report
As shown on page 1 of Attachment 3, the current FY26 ending unassigned fund balance equals $31.9 million, which is $8.4 million above the FY26 target. This amendment utilizes $4 million of this balance to increase the General Fund transfer to the CIP in support of the FY 2027 through FY 2031 adopted Capital Improvements Program budget.
Impact Statements
Equity
This amendment includes increased funding for the Senior Assistance Fund and Housing Opportunities Fund, which help to ensure equitable access to city programs and homeownership.
Environment
This amendment includes a $4 million transfer to the CIP, which includes a new project to fund Building Energy Performance Improvements (GA26), as well as energy efficient components in other projects where possible.
Economy
This amendment includes additional funding for the Housing Opportunities Fund, which helps people purchase homes within city limits. Homeownership boosts local economies through property taxes, home improvements, and retail spending.
Mayor and Council History
This is the fourth budget amendment for FY 2026. The FY 2026 budget was adopted by the Mayor and Council on May 5, 2025, and amended on August 4, 2025, November 10, 2025, and March 9, 2026.
Fiscal Impact
The following operating fund(s) will be adjusted if this budget amendment is adopted:
TABLE 1
|
Operating Fund |
Amended Budget |
6/8/2026 Amendment |
Amended Budget |
|
General Fund |
$122,671,286 |
$6,936,100 |
$129,607,386 |
|
Water Fund |
$17,941,582 |
$843,820 |
$18,785,402 |
|
Sewer Fund |
$15,982,230 |
$509,112 |
$16,491,342 |
|
Refuse Fund |
$9,783,447 |
$ - |
$9,783,447 |
|
Parking Fund |
$2,926,520 |
$ - |
$2,926,520 |
|
Stormwater Mgt. Fund |
$8,027,891 |
$ - |
$8,027,891 |
|
Special Act. Fund |
$2,890,749 |
$206,700 |
$3,097,449 |
|
CDBG Fund |
$526,000 |
$ - |
$526,000 |
|
Speed Camera Fund |
$1,380,080 |
$ - |
$1,380,080 |
|
Debt Service Fund |
$3,342,000 |
$ - |
$3,342,000 |
|
Total |
$185,471,785 |
$8,495,732 |
$193,967,517 |
No Capital Improvements Program (CIP) funds will be adjusted if this budget amendment is adopted.