Staff recommends City Council hold a public hearing and adopt the FY2026 budget amendments.

This budget amendment request addresses several critical financial adjustments, primarily focused on fulfilling contractual obligations and maintaining infrastructure. The largest allocation facilitates over $12.8 million in transfers related to the Historical Tax Credit Lease for the Former Federal Building, alongside a $1.27 million debt payment for City Hall funded by tax credit revenue. Additional requests include approximately $70,800 to address an incinerator malfunction at the Animal Shelter, specifically covering essential repairs and cleanup fees. The request also designates $609,517 for Axon Police Software and equipment, while authorizing a technical correction of $695,538 to restore funding for a Motorola Radio installation. Importantly, all proposed amendments are fully covered by incoming revenues or existing fund reserves, requiring no new taxpayer funding. Collectively, these amendments ensure that debt service, public safety technology, and emergency facility maintenance are appropriately funded through dedicated sources.

The following items are requested budget amendments for the 2nd quarter of Fiscal Year 2026. On 2/11/2026, the City Council Budget and Finance committee met and discussed the following budget amendments. The committee voted unanimously to approve the following amendments to the FY2026 budget.

• Historical Tax Credit Lease ($12,870,914): Facilitates debt payments and transfers for the New City Hall (Former Federal Building), fully covered by tax credit payments. A budget amendment is requested to facilitate the payment of debt and other agreed-upon expenses within the Historical Tax Credit Lease structure. This action involves a transfer from one Historical Tax Credit entity to another, as well as a transfer out to the appropriate fund for debt payment. While no budget was originally approved for this specific fund, all associated expenses are fully covered by payments received on the historical tax credit. These fees were explicitly outlined in the original agreement.
• Facilities ($57,812) & Public Safety ($12,988): A budget amendment is requested to cover the expense of the incinerator malfunction and resulting cleanup fees. This expense will be covered by Facility and Public Safety reserves. 
• City Hall Debt ($1,278,500): A budget amendment is requested to allow payment on the City Hall outstanding debt from funds received from the payment of the Historical Tax Credit. A previous amendment increased this by $5,900,000. This request is to cover additional Historical Tax Credit received. 
• Capital Replacement ($609,517): A budget amendment is requested to cover the cost of the Axon Police Software covering the first round of equipment and the installation of software. This will be paid from reserves accumulated to pay for tasers and bodycams from the Public Safety Equipment Capital Replacement Fund.
• City Hall Construction ($695,538): This amendment corrects a premature reallocation of funds regarding the Motorola Radio installation. Due to inconsistent communication with the vendor, the project was inaccurately identified as complete, and its remaining balance was transferred to City Hall Construction. It has since been clarified that the original contract amount remains due. This request seeks to restore $695,538 to the project budget to satisfy our outstanding contractual obligations.

The impacts of these expenses will vary by fund. However, there is sufficient revenue and cash on hand to cover these expenses in all funds. 

City Council may:
Approve; or,
Not Approve. If not approved, some funds may be over budget in FY26, and the City would not be compliant with State law (Title 7, Chapter 6, Part 40)