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Nassau staff proposes balanced FY2526 budget; no tax-rate increase
Summary
City staff presented a proposed fiscal year 2526 budget that holds the tax rate steady, uses leftover certificate of obligation proceeds for capital projects and relies on a modest year-end surplus to balance next year without dipping into fund balance.
City staff presented the proposed fiscal year 2526 budget and told the Nassau City Council they are proposing to keep the tax rate unchanged and not draw on the city's fund balance. "There is no change in our proposed tax rate from last year. We are proposing to adopt the same tax rate that you all had last year, which is $0.5078 per $100 valuation," City staff member Mr. Hemminger said during a Sept. workshop.
The proposal sets general-fund revenues at about $18.5 million, a figure staff said appears to be a roughly 22% increase from last year but is driven largely by an accounting change moving personnel costs from utility funds to the general fund. Hemminger told the council the city expects to end the current fiscal year with about $350,000 in surplus and that the proposed budget would use some of that surplus to offset a projected shortfall in next year's budget without reducing the city's unassigned fund balance.
Hemminger described a conservative budgeting method: "All revenues are rounded down, all expenses are rounded up," to avoid midyear shortfalls. He said staff also separated debt service as its own fund and improved capital-project tracking through new software and project codes.
On reserves, Hemminger said the city’s unassigned fund balance is preliminary while year-end accounting closes, but staff estimate it at between $7 million and $8 million—about 40 percent of the proposed $18.5 million budget, or roughly four to five months of operating expenses. He told council: "The auditors will almost all tell you that 25% is the bare minimum to maintain your bond ratings." The city's financial policy target shown in the budget book is about 119 days of reserves.
Staff recommended the council review priorities if it prefers to preserve the full projected year-end surplus rather than use some of it to fund next year’s projects. Hemminger said staff can present options for cutting lower-priority projects if the council wants a strictly single-year revenue-vs-expense balance.
Less-critical line items and timing notes include a possible minor adjustment to the adoption calendar to ensure statutory public-notice timelines are met; staff said a special council meeting might be required to satisfy those deadlines.
Ending: The workshop was presented as the first formal discussion of the proposed FY2526 budget; staff invited council members to send questions and noted the full proposed budget book is available on the city website for those who want detail beyond the highlights presented.
