Galena reviews proposed FY2026 operating budget; staff flag general-fund shortfall and capital priorities

Interim Administrator Matt Oldenburg presented the City of Galena's proposed fiscal year 2026 operating budget at a special council work session on April 7, 2025, saying the plan projects roughly $13.1 million in revenues against about $14.0 million in expenses and identifies a general fund shortfall.

Oldenburg said the proposal would keep all 19 city funds in compliance with the city's minimum fund-balance policies and that 12 of the 19 funds are balanced or in surplus. "We are looking at a general fund deficit of about $757,029," Oldenburg said, and he told the council the city does not plan to reduce public services or to borrow to cover the proposed gap.

The budget preserves funding for employee positions and most capital projects while flagging several large capital needs that carry into upcoming years. Oldenburg told the council the proposed property tax levy rate will decrease and that the change would lower the tax on a $100,000 assessed value by roughly $33.79 compared with the prior year.

Major capital and maintenance items described in the presentation include replacement of the pump assembly at Well 7, a large lead-line replacement project (Oldenburg said the work is 100% grant-funded and could carry into the next fiscal year), stormwater and street projects in the Hill/Prospect/High Street neighborhood, pickleball-court construction (Oldenburg cited a $420,000 price with about $101,000 expected from donations), traffic-signal radar detectors under the motor-fuel-tax program, and repairs to the Coal Stack bridge deck and other municipal facilities including Turner Hall tuckpointing.

On utilities, Oldenburg said the water fund shows a multi-thousand-dollar deficit driven in part by planned pump replacement and other capital needs; he said the fund balance is projected near the city's 30% minimum requirement (Oldenburg cited about a 33% fund balance at year-end). For sewer, the presentation listed phased replacements of SCADA and variable-frequency-drive equipment, with roughly $170,000 proposed for the coming year to begin a larger multi-year program.

Oldenburg said the city expects to rely on a mix of grants, transfers among funds and existing fund balances to cover capital costs. He noted the city recently received EPA funding for a water-service-line replacement project and that some larger projects may require state revolving fund loans, which will require the city to demonstrate sufficient revenue to the funding agencies.

On personnel costs, Oldenburg summarized proposed pay and benefit changes included in the draft: a 4% pay proposal for seven police union employees (no market adjustment this year), a roughly 15% market adjustment proposed for public works under a recent union agreement, a 3% proposed pay increase for nonunion salaried staff, a $1-per-hour increase for hourly employees plus an average 4% market adjustment, and proposed changes to employer health-premium contributions (Oldenburg stated the city typically pays 80% of single-employee premiums and proposed increasing that to 100% for single plans). Oldenburg presented those figures as draft assumptions to inform the council's discussion.

Council members' questions and comments during the session focused on timing and funding for specific capital projects (including a federally funded bridge project in which Oldenburg said the county led the project and Galena's share would be about 10 percent), the status of an EV-charging station grant application, and sequencing of street and sewer work that could affect bid prices and how many streets can be completed this year.

The council set the remainder of the formal budget process: a public hearing at the council meeting on April 14, followed by discussion and possible action. Oldenburg said, if needed, the council could hold a second work session on April 21; the last opportunity to adopt the budget before the new fiscal year would be April 28.

Votes at a glance

Motion to adjourn (April 7, 2025): moved by "Jay," seconded (speaker not named in transcript); roll call in the minutes shows at least Keefer and Westheimer voting yes; the mayor declared the motion carried and the meeting adjourned.

Ending: Oldenburg and council members asked staff to circulate the presentation to council members before the April 14 public hearing and to return with any requested clarifications at the next meeting.