Presenter outlines preliminary general-fund budget, warns of revenue shortfall and possible small tax-rate rise

A city staff presenter told the committee the preliminary general fund budget for next year faces multiple pressures: reduced revenue from recent voter‑approved exemptions, the end of American Rescue Plan Act (ARPA) funding that had temporarily supported positions, and continuing cost increases for labor, materials and debt service.

"Property taxes for next year, about 328,000,000," the presenter said, and later noted public-safety costs shown on the slide at about "$371,000,000." He described the combined revenue and cost impacts as roughly "$21,000,000" that the city must absorb next year and said the city is "issuing debt next year, so that's causing the tax rate to go up next year." The presenter said a business personal-property exemption will reduce revenues by about $7,000,000 and disabled‑veteran exemptions by about $3,600,000.

Staff emphasized that property tax and sales tax are the primary sources available for incremental growth and that some one‑time revenues previously used to balance budgets will not be available next year. The presenter said the average home value for next year is projected at about $233,000 and the average homeowner tax bill about $105.39 under current assumptions.

The presenter noted a state limit on how much cities can increase property taxes and summarized it as "a 3.5% cap," stressing that the cap does not carve out police and fire costs. The city council, he said, directed departments to return with additional efficiency and cost‑reduction options; staff will hold more budget workshops and return to the council for another round on June 22. The committee agreed to meet around the 15th to review policy-language cleanups and staff responses.