During a recent city commission meeting, officials presented an overview of the proposed budget for fiscal year 2025, highlighting significant financial challenges and the need for strategic adjustments. The proposed budget anticipates total income of approximately $51 million, with expenditures projected at $65 million, leading to a concerning $13 million deficit that will be covered by the city’s fund balance.

City Manager Dave Swartz emphasized the importance of feedback from the commission to navigate the budget effectively and work towards reducing state oversight. He noted that the city has managed to save $1.5 million through discussions with department heads, but concerns were raised about the sustainability of these savings in the long term.

The meeting also addressed staffing changes, with an increase of six positions across various departments, including housing and social services, and a notable rise in the stormwater division due to staffing needs. The IT department is set to see an increase in funding as the city prepares to implement a new Enterprise Resource Planning (ERP) system.

Commissioners expressed concerns about the city’s declining fund balance, which dropped from $17.9 million to $13.5 million over the past year. This decline has raised alarms about the city’s financial health, especially given the backdrop of ongoing capital improvement projects that require substantial funding. The city is currently facing a $5 million shortfall in the general fund, with revenues projected at $29 million against expenditures of $34 million.

Discussions also touched on the millage rate, currently set at 9.35, with some commissioners advocating for a reduction to alleviate the tax burden on residents. The potential impacts of lowering the millage rate were discussed, with estimates indicating that a 1% reduction could result in a loss of $150,000 in tax revenue.

Overall, the meeting underscored the city’s financial challenges and the need for careful planning and community engagement as officials work to balance the budget while addressing infrastructure needs and maintaining essential services. The commission will continue to deliberate on these issues in upcoming workshops, aiming to finalize a budget that supports the city’s growth and stability.