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City manager presents FY26 proposed budget; fund-balance, state revenue risks highlighted
Summary
City Manager Phil Kroll presented the final manager's FY26 proposed municipal budget April 7, noting a lean proposal that meets council goals of no new staff while flagging fund-balance levels and possible state funding disruptions tied to a pending referendum.
City Manager Phil Kroll presented the city manager’s FY2026 proposed budget at the April 7 City Council workshop and described the document the council will use if no alternative is adopted by July 1.
Kroll said the manager’s packet reflects only limited changes since the last workshop — mainly moving recreation special-revenue program registration lines on to the operating budget as offsetting revenue and expense (about $350,000) — and otherwise holds to council guidance of no new staff and maintenance of existing GRAMA-funded programs.
Kroll and assistant staff discussed the city’s fund-balance position: FY23 audited fund balance was around $14 million (about 13.0 percent of the budget); unaudited FY24 appears near $16.7 million (about 14.7 percent). The city’s working projection for FY25 stands roughly at 14.28 percent, though staff said FY24 audit finalization is pending and percentages will change as accounting closes.
Both Kroll and Mayor Jeff Hyman warned councilors of external revenue risks tied to state-level fiscal uncertainty. The manager noted the city is monitoring potential loss or delay of roughly $21 million in state-related revenues should a state referendum or federal action interrupt transfers; staff and the mayor described how a prolonged state government funding pause could force municipalities to use fund balance for cash flow. The mayor cited an Attorney General opinion indicating no automatic state continuing-resolution mechanism exists, amplifying the cash-flow risk in certain scenarios.
Kroll said, after backing out non-discretionary drivers such as debt service and county tax, the municipal tax-levy impact presented in the proposed documents equates to about a $1.207 million increase (about 1.37 percent) on the municipal levy components the council can control. He reiterated this budget is intentionally lean and aligned with the council’s stated priorities.
Councilors asked about staffing vacancies and whether some unfilled positions could remain vacant to achieve savings; staff said a staffing report would be provided at a subsequent workshop with vacancy timing and recruitment details. Kroll also noted that some seasonal and part-time parks staff do not begin until May, and that recent changes in community-service and sheriff work-release programs temporarily reduce the city’s ability to supplement parks maintenance with outside crews.
Kroll closed by noting three upcoming budget workshops where the council will continue deliberations and by urging caution given ongoing state and federal budget uncertainties.
