City Manager Mike presented the recommended 2026 budget and a set of one-time funding requests drawn from the city’s $17.5 million unrestricted fund balance, asking council for direction before public hearings.

The request list included: the Arts Commission’s $100,000 request (staff included $40,000 in the recommended budget and identified $60,000 as remaining), the Avalon Foundation’s $60,000 request for dressing-room improvements in the city-owned Avalon Theater, and a $20,986 request from the Counseling Education Center (CEC) to cover increased construction-related costs including transportation capacity payment and inspection fees for their Orchard Mesa location. Mike described the unrestricted fund balance as a non-recurring “savings account” the city can draw on for one-time expenditures but not recurring operations.

Why it matters: council members said they want to support local nonprofits but must weigh one-time grants against larger operational cuts in the recommended budget. Several members pressed for due diligence before allocating one-time city funds to organizations that also serve residents outside city limits.

What council did and said: A majority of council signaled support for staff’s recommendation to fund $40,000 to the Arts Commission from one-time funds and to provide $60,000 to the Avalon Foundation for dressing-room and related facility improvements at the Avalon Theater. Council also expressed concern about the Counseling Education Center request and asked staff to return with more information, including a project budget, the current funding gap, other funding sources they have sought or have pending, and any loans the CEC is pursuing. Council asked staff to confirm whether the CEC has final approvals and to document what remaining impact or connection fees they need paid.

Council discussion highlights:
- Council Member Scott said the Avalon renovations are an investment in a city-owned facility that supports downtown economic activity and recommended the funding be considered a typical one-time capital use. “This is a city-owned facility…we see a benefit,” he said.
- Council Member Anna and others urged extra vetting for the CEC, noting the city previously provided nearly $1 million from ARPA for the facility and want assurance the CEC has pursued other funders before the city provides additional one-time support.
- Council members asked whether city staff can waive facility rental fees for groups; staff and the city CFO, Jay Valentine, explained the city has a contract (operator: OBG/OBG-like operator) that runs the Avalon, and fee waivers would depend on that contract and the operator’s policies. The city’s recommended budget reflects a reduced subsidy to the operator compared with prior years.

Next steps: Council directed staff to: (1) include $40,000 for the Arts Commission and $60,000 for Avalon in the list of one-time items to consider at final hearings, and (2) return with more detailed backup on the CEC request (project budget, other funders asked or pending, loan status and specific remaining costs) before making a final allocation decision at the November public hearings.

Ending: The items will be revisited at the November budget hearings; staff emphasized these are one-time allocations drawn from fund balance and would not add to ongoing operating costs.