Taylor council hears mayor's fiscal 2026 budget overview; mayor proposes $2.9M use of fund balance

City of Taylor staff presented the mayor's proposed fiscal year 2026 budget at a council study session, describing a mayor's proposal that would use about $2.9 million of the general fund balance while keeping an estimated year-end fund balance above $20 million.

Jason (Budget and finance staff) opened the session with an overview of the budget document and accounting basis, saying, "We just do the cash basis budget because that is the state required, basis for the budget." He summarized FY25 adjustments, revenue and expenditure changes and the mayor's FY26 assumptions.

The mayor's proposed general fund would draw $2.9 million from fund balance and fund just over $3 million in one-time capital outlays, most notably purchases for the fire department including previously approved fire engines. Staff projected an ending FY26 general fund balance of about $20.3 million, roughly 39.3% of operating revenues under the mayor's plan. For the current fiscal year, staff said FY25 amendments increase projected additions to fund balance to about $524,000, bringing the projected FY25 ending balance to about $23.2 million (about 39.8% of operating revenues).

Revenue lines called out by staff included a projected decline in licensing and permit revenue driven by lower cable franchise receipts, a state grant revenue increase of about $806,000 (including recognition of enhancement grants tied to recently received ambulances and a pavilion at the Petting Farm), a courts-related fines and forfeitures increase of about $505,000 based on year-to-date receipts, and an "other revenue" increase of roughly $317,000 tied to a private donation to the senior center. Staff emphasized that many grant revenues are offset by grant-funded expenditures and therefore net to zero on the bottom line.

Department highlights in the mayor's proposed FY26 budget include: - Public safety: Police expenditures were projected to increase about $1.1 million (about 8.5%), largely for wages and benefits; fire expenditures were projected to increase about $1.2 million (about 14%), driven in part by one-time vehicle and equipment purchases tied to capital outlay. The mayor's plan keeps previously approved fire engine purchases in the FY26 capital plan. - Courts: The court's proposed budget rose from an amended FY25 budget of roughly $6.5 million to a mayoral proposal of about $7.2 million, driven in part by rising caseloads. The presiding judge told the council the court's annual caseload has grown from about 42,000 a few years ago to an anticipated 52,000 this year and said the budget includes additional magistrate capacity. On the treatment court program, the judge reported strong outcomes: "our treatment court program for graduates of our program, the recidivism rate is, 4 percent within the 3 year time period," compared with an 18 percent recidivism rate for similar individuals who do not participate. - IT and ARPA: The IT budget reflects significant one-time ARPA expenditures in recent years. Staff said IT is expected to show a large reduction (about $1.2 million or 48%) in FY26 compared with FY25 because many IT costs were one-time ARPA-funded investments. The city described ongoing contractual support and a multi-year engagement with an external IT services provider (Skyline/SkyNet in the presentation) and plans for Microsoft 365 migration and multi-factor authentication purchases. - Parks, capital and enterprise funds: Parks and recreation expenditures were projected to drop about $3.6 million next year because FY25 included ARPA-funded one-time projects. The golf course fund's projected profit estimate rose from about $200,000 to $766,000 based on year-to-date results; staff said there will be a detailed discussion with golf course management in a subsequent meeting. Echo Creek sewer operations shared-cost increases required adjustments to sewer fund estimates.

Other program and operational notes included a proposed city millage rate (city portion only) of 25.487 mills, an increase of 0.384 mills tied in staff comments to pension and retirement liabilities for police and fire; staff noted taxable values and final assessed values are subject to assessor and board review. Staff also described planned continuation of department-level line items and said department worksheets include position detail and FTE information.

Election and licensing topics raised during the study session included early voting and one-time election grants. The clerk asked the council to note staffing and early voting decisions; she said the clerk's office received approximately $26,000 in grant funds to help offset election worker pay and reported a large early-vote turnout in November. On adult-use cannabis licensing, the clerk said three provisional or temporary licenses are in the pipeline; the city budgets conservatively for revenues from marijuana licensing and anticipated revenue sharing.

Staff and councilmembers also discussed longer-term projects and administrative items: implementing a new ERP/permit system to allow online permitting and scheduling, efforts to improve rental inspection capacity with a dedicated inspector and related clerk support, and a planned review of health insurance and retiree coverage. Human resources staff and the finance director noted that Blue Cross Blue Shield rates and retiree health costs are driving pressure on fringe benefit lines (staff cited a roughly 30 percent increase in the Blue Cross Blue Shield premium this year) and reported efforts to reduce waste and ensure terminated employees are removed from health coverage in a timely manner.

No formal votes on budget adoption were taken during the study session; the meeting was a departmental review and discussion of the mayor's proposed FY26 budget and related FY25 amendments. Council members and department heads scheduled additional department presentations and follow-up reviews as part of the public budget process.

The council set follow-up department presentations and indicated final hearings and adoption steps will follow the formal public notice and budget hearing process required by state law.