Staff proposes $5 million cash transfer from general fund toward Fire Station 4; commission gives preliminary support
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Summary
Finance staff presented general fund projections and proposed using $5 million of current reserves to partially fund a new Fire Station 4, which would reduce the general fund balance but could save interest on borrowing; commissioners signaled support to budget the transfer and asked staff to finalize financing plans.
Debbie Pack, the city’s director of finance and administration, presented projections July 14 showing the general fund ending balance at about $32.0 million as of Dec. 31, 2024 and a projected year‑end fund balance of roughly $27.8 million for 2025 under current assumptions. Pack said that, with those reserves, city staff proposed using $5 million in cash from the general fund to partially fund construction of Fire Station 4 and thereby reduce future debt issuance.
Pack said the Fire Station 4 project is expected to be under $10 million in total; a $5 million cash contribution in 2026 would lower borrowing needs and reduce future interest costs. Under the proposal, the 2026 budget would show a net negative of roughly $690,000 and a year‑end general fund balance near $22 million, still above the city’s stated target balance of $13 million.
Staff emphasized flexibility: budgeting a transfer does not obligate the city to spend the cash; the city could still finance the project later and choose to return funds to reserves if circumstances change. Pack said the city has previously used reserves to reimburse cash‑paid project costs once debt financing occurred and assessed tradeoffs between using cash versus debt to finance infrastructure.
Commission discussion: commissioners asked about timing, contractor payments, and whether other capital priorities could compete for funds. Several commissioners signaled support for funding $5 million in cash for the station; the staff reported a consensus to budget the transfer and said the final decision on actual cash use would follow further financial analysis and timing decisions related to the planned bond issuance.
Next steps: staff will include the $5 million transfer in the draft 2026 budget as directed, finalize debt capacity analyses and the financing timeline, and return to the commission with financing recommendations and the formal budget for adoption.
