Webster Groves manager outlines FY2026 budget that would use reserves for stormwater, keep pay increases for staff

Webster Groves City Manager Dr. Peebles presented the proposed fiscal 2026 budget to the City Council on April 15, saying the proposal reflects strategic priorities while relying on some reserve spending to begin stormwater repairs and to finish park projects funded by Prop W. "The budget is the foundation that supports all of the work that we do," Dr. Peebles told the council.

The proposed all‑funds budget reflects an expected drop in one‑time bond and Prop W receipts that pushed all‑fund revenues down compared with the previous year. Finance Director Gregory Donovan told the council the city faces a roughly $1.18 million general‑fund shortfall at the manager's proposal — a gap he said in part reflects conservative revenue assumptions and planned spending on one‑time projects. "Please hold me to that. If I get too carried away, just say, Gregory, stop," Donovan said while reviewing revenue risks.

Why it matters: the budget sets operating and capital priorities — including starting the stormwater master‑plan projects, continuing Prop W park work, and funding employee compensation adjustments — and it determines whether the city will use reserves to smooth a one‑year shortfall.

What the proposal does - General fund: Dr. Peebles proposes roughly $23.3 million in general fund revenue against about $24.5 million in expenses, a planned draw on reserves of about $1.18 million. The manager said vacancy savings and unexpected one‑time items can change the final result during the year. - Stormwater: The proposal includes $2.0 million of stormwater projects to begin implementation of the master plan; the stormwater fund currently takes in about $250,000 annually so the projects will require reserve transfers. - Prop W and parks: About $2.7 million of requested spending is tied to Prop W projects (pool/water‑park, park improvements), which were one‑time sales tax/bond proceeds received in the prior year. - Compensation: Dr. Peebles recommends an average market adjustment focused on frontline grades and a 3% COLA for non‑union staff; she also built in retention stipends as one‑time payments. Health insurance costs were budgeted with a 6% increase, a figure the manager described as favorable compared with earlier estimates.

Funding and pension pressures Donovan warned that the property‑tax revenue earmarked for pensions — constrained by the Hancock Amendment limits — will not fully cover pension obligations next year. He said pension contributions for public safety will require nearly all of the pension‑earmarked receipts and leave the general pension contribution short roughly $72,500 under baseline assumptions. "We will be spending more in pension contributions than we will be taking in," Donovan said. That shortfall could widen depending on the outcome of the pending police collective bargaining agreement.

Reserves and timing The budget assumes some use of reserves for one‑time projects, including stormwater and Prop W implementation. Dr. Peebles and Donovan recommended the council complete amendments by May 20 so staff can assemble the final public‑hearing packet ahead of the June hearing and final adoption on June 17.

Budget presentation context The finance and manager presentations included a detailed year‑to‑date performance report to March 31 showing revenue collections running below the prior year for sales tax and other lines, and an investment report showing the city deploying cash to mid‑term investments. Donovan said sales tax trends were down roughly 3% year‑to‑date statewide and the city is sensitive because sales tax is a large share of general fund revenue.

What council asked for next Council members pressed for further details on insurance premium risks, the pension reserve, and the process for prioritizing the Prop W projects. Dr. Peebles said departmental presentations would follow and that the council will consider business‑district requests at the May 6 meeting. "I'm really hoping for some deep discussion," she said.

What comes next Public hearings and budget amendment windows are scheduled in May and June; the council set May 20 as a work session for boards and commissions and to review amendment requests. The city manager said she expects to return with updated insurance numbers by June and would notify the council by email if legal or pension developments require interim action.

Ending note Donovan described the manager's proposal as deliberately conservative on revenue and targeted on personnel and infrastructure: "We're putting forward a budget that is asking of you to consider spending some of our reserve funds to support the general fund as well as some other projects," he told the council.