By Zach Hagadone
Reader Staff
The Sandpoint City Council voted July 9 to hold off on adopting the preliminary fiscal year 2026 budget — which would have established a maximum expenditure of $49,927,665 — and instead take up the matter at its Wednesday, July 30 meeting.
However, statute requires that the final budget be adopted by Wednesday, Aug. 20, on which date the council will hold a public hearing.
Photo by Ben Olson.
“This is the busiest time of the year for a lot of us, and there’s a lot of information moving forward, and I would like to take the next couple of weeks to do a deeper dive and have more staff time before approving this,” Councilor Justin Dick said, later adding, “I don’t feel comfortable enough moving forward.”
Sandpoint Mayor Jeremy Grimm told the council that the vote would serve only to establish a maximum amount of expenditures based on forecasted revenues, and could be adjusted downward.
“This doesn’t prevent you from making adjustments, it gives you time to hear from all the departments and the specifics of their budgets,” he said. “It keeps us on track and gives us a little cushion.”
However, Councilor Kyle Schreiber first moved to table the tentative budget adoption vote to Wednesday, Aug. 6, but then amended his motion to schedule it for July 30. Dick seconded and Council President Deb Ruehle and Councilor Pam Duquette voted in favor. Councilors Joel Aispuro and Rick Howarth opposed.
“I am worried about the timeline. Things happen, and again, I think the intent of this is to simply go set a maximum number,” Howarth said. “All of the detail work can happen over the next three, four, five, six weeks.”
Likewise, Aispuro said, “I don’t see a reason to postpone this.”
In the meantime, the preliminary budget, as written, represents an overall 1.13% reduction from 2025, down from $50,499,054.
In his budget transmittal letter, included in the introduction of the document, Grimm wrote that it “not only balances dollars and cents but reflects what I believe to be the values, priorities and aspirations of the community.”
Specifically, he pointed to creating and maintaining “a leaner, more focused government,” while putting “infrastructure first,” responding to growth and public concerns and planning for “a balanced future.”
Some highlights include $7.2 million for street and sidewalk improvements — along with $2 million from the Urban Renewal Agency for Phase 3 of the long-term downtown revitalization project — $4.5 million for wastewater system upgrades and a new $1 million expenditure for RV park improvements at City Beach, the latter which is 95% funded with a state grant.
Other priorities in the coming fiscal year will be implementation of the recently approved parking management plan, updated development impact fees and reviewing the zoning code. Meanwhile, Grimm cited Idaho House Bill 389 as a factor limiting revenue growth.
Passed in 2021 as a way to provide property tax relief, H.B. 389 stipulated that new construction comes onto the tax rolls at 90% of its value — rather than the previous 100% — essentially providing growth with a discounted levy rate.
Because of that, Grimm wrote, “New construction often contributes less than its actual impact due to valuation rules. Infrastructure continues to age faster than it can be replaced.”
To address that challenge, Grimm wrote that the city will look to grants and intends to again propose a local option tax in spring 2027, with levied funds supporting street repair and improvement. Sandpoint voters rejected a 1% local option sales tax in 2024, which also would have been dedicated to street infrastructure.
Grimm also pointed to impending downtown and waterfront developments that, while they “will enhance long-term economic vitality,” could result in a decrease in local option lodging tax revenue to the tune of $220,000 in the coming year.
“However, the long-term return — stronger infrastructure, increased economic activity and revitalized public spaces — will far outweigh the short-term impact,” he wrote.
Drilling into the preliminary budget shows funding for the Sandpoint Police Department at $3,898,322 in FY’26 — up from just more than $3.6 million — while the Sandpoint Fire Department budget is reduced to $1,358,410, down from $1.48 million.
The Community Planning and Development budget would increase to $5,979,426 — up from $5.8 million — including the new $1 million expenditure for City Beach RV park improvements and $210,000 for City Beach parking lot improvements.
There is nothing in the proposed CPD FY’26 budget for the James E Russell Sport Center — which in FY’25 had an $800,000 allocation — nor is the Travers Park playground and splashpad in the new budget, after a $431,000 allocation in FY’25.
The Public Works budget would fall by about $1 million to $33,975,381. Part of that reduction comes from an FY’26 budget allocation of $400,000 for lift station improvements, which with a $2.6 million expenditure in FY’25, represented the department’s single largest allocation. However, the FY’26 appropriation for wastewater treatment facility reconstruction will rise to $2 million from $1.6 million last year.
The Finance, Central Services and Elected Offices budget would all see modest increases, at $707,982, $3,823,252 and $184,892, respectively.
The single largest revenue source for the city is charges for services, which the FY’26 budget pegs at $12,517,321, with those dollars going to the General, Fiber, Recreation, Garbage, Water and Wastewater funds. The Wastewater Fund is the largest beneficiary of charges for services, amounting to $6,245,000.
Current property taxes are budgeted to contribute $5,381,169 to the General Fund — the second largest source of revenue after charges for services.
According to the council staff report, that represents a $328,302 increase from the prior year.
The top five capital projects identified in this year’s budget include $3 million for wastewater treatment facility reconstruction, $2.57 million for water main projects, $2.5 million for Cedar Street reconstruction, $2 million for Phase 3 of downtown revitalization and $1.85 million for corridor improvements on Great Northern Road.
Other $1 million+ projects include sidewalk and bike path projects, street equipment, parks land purchase and the City Beach RV park improvements, among others.
Engineering for the Cedar Street and Great Northern projects is budgeted at $4.35 million, along with $4.3 million for wastewater capital projects, $4 million for water capital projects and $2.66 million for park maintenance and capital projects. Finally, the budget anticipates spending $100,000 for a new City Hall fire alarm system.
“This budget affirms a commitment to a government grounded in accountability, sustainability and service,” Grimm wrote. “We’re investing in core needs before expanding further. We’re prioritizing residents and building internal capacity. And we’re listening.”
Find the full fiscal year 2026 budget book at bit.ly/4lIKy8H.
