Saginaw officials present FY26 budget with big health‑care and capital swings
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Summary
City staff presented a $203.77 million citywide fiscal 2026 budget that keeps general‑fund services steady but reflects large swings in grant‑funded projects, multi‑million dollar medical facility spending and an unusually large projected rise in employee health‑care costs.
Saginaw officials on Monday presented a proposed fiscal year 2026 budget that city staff said balances immediate service needs with a shifting mix of large grants and rising personnel costs.
The budget overview, delivered by Yolanda Bland, director of the Office of Management and Budget, lays out a $203,770,000 citywide budget and a $45,140,000 general fund — an increase of roughly 2% from the prior year in the general fund but a 13% drop citywide driven primarily by a reduction in one‑time capital and grant spending from FY25.
Bland said the FY26 plan "continues to reflect our commitment to quality and services for our residents, as well as preserve our organization's long term financial stability." She told council the state‑sponsored Saginaw Medical Facility Fund (created in FY25) is budgeted at $21.27 million for FY26 and that American Rescue Plan Act (ARPA) balances will decline as previously approved projects are spent down.
Why it matters: Bland and the city manager warned council that spikes in benefit costs and volatile grant and construction schedules drive much of the year‑to‑year change. Bland said active employee health‑care costs are projected to increase by roughly 30% — the largest single year jump she has seen in 18 years — and retiree health care by about 12%.
City managers told council that those health‑care and pension pressures will be offset only partly by grant revenue and user‑rate increases for water and sewer. Bland also noted the city’s continuing reliance on enterprise funds: sewer and water account for about 42% of the citywide budget, and the water and sewer funds together show planned reductions in capital work compared with FY25 even as the departments continue projects that are partially grant‑funded.
Bland highlighted several specific changes: a projected $21.27 million deployment for the medical facility fund, a $28.92 million decrease in ARPA fund balances as projects are spent, and a roughly $18.8 million preliminary award from the Clean Water State Revolving Fund for system improvements. Major‑street funding increased in the FY26 plan because of planned projects; local‑street funding rises partly because of Saginaw County road millage receipts that were not available in the prior year.
Council discussion focused on the public‑safety millage and personnel complements: Bland said the public‑safety millage revenue is intended to fund 20 police and 10 firefighter positions (the citywide complement is larger), but some payroll and benefit increases get shifted between funds to keep the millage fund balanced. City manager Timothy Morales and Bland said the millage fund is structured to break even each year and that salary and benefit increases put pressure on that balance.
Bland also reminded council that a formal public hearing and adoption are scheduled for May 19 and that OMB is available for member briefings in advance.
Background details: The presentation described FY22–FY25 historical totals and explained that non‑general‑fund sources (special revenue, enterprise, internal service funds) drove most of the FY25 spike in the citywide total. Bland encouraged council members to review the budget overview (pages 31–59 in the packet) for line‑by‑line variance explanations.
What’s next: Council did not adopt the budget at the meeting; the public hearing and scheduled adoption date is May 19. Bland offered multiple follow‑up meeting slots for individual council members to review department budgets in more detail.
