City Manager Mark Ziegler told the Shelton City Council on Sept. 23 that staff expects to use the city's unreserved general-fund balance to close a preliminary 2026 budget gap and asked for council guidance on priorities. "This is intended to be an interactive process, really to get guidance from the council on where how the 02/2026 budget is gonna be formulated," Ziegler said at the study session.

The nut graf: The council was presented a high-level 2026 budget framework showing the city has relied on fund balance to balance recent budgets and faces a preliminary shortfall; members repeatedly identified public safety as a top priority while asking staff to return with a preliminary budget and scenarios that protect multiyear sustainability.

Ziegler walked the council through the calendar for finalizing the 2026 budget, including departments' fee changes, an Oct. 1 review of preliminary decisions, and a planned final adoption on Dec. 2. He said the 2025 adopted general fund budget showed about $15.9 million in budgeted revenue and just over $17 million in expenditures, with roughly $1.1 million budgeted from the unreserved fund balance to balance the year. He told the council the city maintains a policy target of reserves equal to 20% of annual expenditures and described concerns about eroding reserves as costs rise.

During the presentation, Ziegler outlined assumptions that shaped the 2026 baseline: removal of one-time 2025 expenditures, recognition of recurring lease and contract costs (for example vehicle leases and an anticipated public-defense contract increase), and known employee costs such as COLAs and benefit changes. He said staff estimates and the departmental one-time requests produce a preliminary structural gap that would require use of unreserved fund balance unless new revenue or cuts are adopted.

Council members asked about the scale and sustainability of drawing on reserves. Council member Stearns and Council member Gilmore expressed support for maintaining or restoring staff and services, particularly public safety, while several members emphasized the need for a conservative approach so multiyear obligations do not outpace revenues. Ziegler said staff will return with a preliminary budget that reflects council direction and the council's comfort with unreserved-fund balance use; he noted the statutory schedule requires the preliminary budget to be noticed in early November.

Ending: Ziegler and finance staff asked the council to confirm priorities so staff can prepare the November preliminary budget. The study session closed with the council signaling a willingness to start 2026 with a similar planned draw on unreserved fund balance as 2025 and to vet one-time requests and ongoing costs against that constraint. No formal budget adoption or tax action occurred at the meeting.

Speakers cited in this article

- Mark Ziegler, City Manager (City of Shelton)
- Terry (Finance director / finance staff; title as in transcript)
- Mary Ricker, City Clerk (City of Shelton)
- Council member Stearns (Shelton City Council)
- Council member Gilmore (Shelton City Council)
- Council member Lindsay (Shelton City Council)
- Diane Estill (Council member; referenced in roll call)

Authorities

[ {"type":"policy","name":"City reserve policy (20% of annual expenditures)","referenced_by":["2026-general-fund-overview-and-council-direction"]}, {"type":"statute","name":"County assessor roll date for new construction (as described: must be finaled by July 31 to appear on next year's rolls)","referenced_by":["2026-general-fund-overview-and-council-direction"]} ]

Actions

[ {"kind":"other","identifiers":{},"motion":"Extend study-session discussion and return a preliminary budget for council review following the timeline presented","mover":"unspecified","second":"unspecified","vote_record":[],"tally":{},"legal_threshold":{"met":false,"notes":"Informal direction; not a formal budget adoption"},"effective_dates":{},"outcome":"consensus_note","notes":"Council signaled support for staff returning with a preliminary budget prioritizing public safety and conservative use of unreserved fund balance"} ]

Discussion vs. decision

{"discussion_points":["2026 baseline budget assumptions and one-time vs ongoing requests","size and sustainability of an unreserved-fund-balance draw","timing for preliminary budget and public hearing calendar"],"directions":["Staff to present a November preliminary budget reflecting council priorities, particularly public safety; staff to provide refined unreserved fund-balance scenarios"],"decisions":[]}