Department of Budget and Innovation
Reference: 3rd Amendment to the 2026 Budget
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez, City Manager
Prepared By: Kathryn Mortensen, Director of Budget and Innovation
Date Prepared: September 16, 2026
PURPOSE
To amend the 2026 budget.
BACKGROUND
The City Council adopted the 2026 Budget on October 21, 2025, at $279,681,910.
This first amendment to the 2026 budget was approved by City Council in March 2026. This amendment brought the total budget appropriation to $291,608,543.
In April of 2026, the capital carryover process was completed, carrying forward an additional $50,326,050 of budget that was unspent in the previous fiscal year for ongoing, multi-year projects. This brought the total budget appropriation to $341,934,593.
The second amendment to the 2026 budget was completed on July 21, 2026, in resolution 2026-64. This amendment brought the total budget appropriation to $343,982,932.
The third amendment to the 2026 budget is necessary to provide for unexpected cost increases for maintenance of our facilities, software, and vehicles. As fuel costs have been rising over the past several months, the city has seen these increased costs as well and require additional budget appropriation to cover. We are also seeing higher costs for facility maintenance costs due to inflation and warmer weather than typical. We have also seen increased utility costs in the cemetery due to a correction in storm fee charges, as well increased electricity and water as at the Recreation Center due to the increased square footage at the newly expanded building. And lastly, this amendment includes an increase to city software for the cost of a renewal that was previously on a three-year term and will now be annual.
This amendment also includes a portion of a new grant received for digitization of documents in the Community Development Department. This work is expected to take place across this year and next. This amendment includes half of the grant amount, with the rest of the grant amount planned to be added to the 2027 budget.
Lastly, this amendment includes a correction of the total from budget amendment two in July of this year. While the increase of $800,000 to the impact fees fund was included in the previous amendment, an error in the total calculation for the fund necessitates it being added to this amendment as an administrative correction.
Overall, this is an increase of $1,628,100. This would bring the total budget appropriation to $345,611,032.
CRITERIA BY WHICH COUNCIL MUST CONSIDER THE ITEM
All changes to Fund-level appropriations of the adopted budget must be made by a Supplemental Budget Appropriation.
FINANCIAL IMPACT
There is a budget impact of $1,628,100 for anticipated expenditures.
STAFF RECOMMENDATION
Staff is recommending approval of the attached Amendment to the 2026 Budget Resolution.
OPTIONS FOR COUNCIL CONSIDERATION
Approve, amend, or deny the proposed resolution.
ATTACHMENTS
Proposed Resolution
Presentation