Missoula council continues FY26 budget hearing as staff report taxable values came in below early estimates

Missoula City Council on Aug. 11 continued its public hearing on the fiscal year 2026 proposed budget as staff presented updated taxable-value information and changes since the Aug. 4 hearing.

Dale Bickel, the city’s chief administrative officer, told the council that the FY26 mayor’s budget emphasizes financial stability and investments in core services. Bickel said the general fund proposed appropriations are about $88,100,000; the combined tax-supported funds (general fund, road and park districts, and the new fire levy) are about $121,000,000; and the total operating budget across all funds is about $200,000,000.

Bickel said taxable-value notices from the state arrived after the Aug. 4 hearing and the city’s estimate of new revenue from property taxes declined from an earlier $4,400,000 estimate to about $3,800,000. The mayor’s proposal includes a city-wide property-tax impact figure of 3.5 percent (this is the city’s definition of new revenue from property tax excluding new construction); Bickel said the effect on a median Missoula home will be a projected 14 percent decrease in city property taxes because statewide appraisal changes and legislative adjustments reduced taxable values in many cases. Bickel showed an example where median market value rose from $399,000 in 2024 to $507,000 (a 27 percent increase) but taxable value fell by 21.7 percent under the new appraisal cycle and statutory adjustments.

Bickel described where the additional $3,800,000 would be allocated: roughly 79 percent toward wage increases for existing staff, 14.8 percent for contractual cost increases (utilities, software, rent and similar items) and about 5 percent for new requests. He said the budget continues investments such as two new street-maintenance positions (funded from gas tax rather than road district or property taxes), the police digital forensics tool (a one-time general fund request of $6,800 added after a council amendment), public-works capital projects including roundabouts and signal work, design work for a new Fire Station 6 site, and phase 2 of a composting facility supported by ARPA funds.

Bickel said the city is increasing its general fund reserves toward the council’s policy goal; FY25 ended with about $3,200,000 projected reserves against a 7 percent goal of about $5,100,000. He said the budget deficit estimate improved slightly, from about $3,000,000 to $2,600,000 in the updated figures.

Councilors asked technical questions about the change in revenue estimates, where the gap was found (Bickel cited lower taxable values and internal adjustments including use of permissive medical levy fund balance), and whether MRA remittance assumptions had changed (Bickel said the MRA figures remain at roughly $3,000,000 in revenues two-thirds of which are remittance). Councilor Bob Campbell asked specifically why the estimate changed; Bickel answered that the original estimate was based on pretaxable values and the final taxable-value summary from assessment notices produced the $3,800,000 figure.

Public comment: no in-person or online speakers signed up to speak on the FY26 budget items 5.1–5.6 at the Aug. 11 session. Councilors and staff reminded the public that the hearing remains open and that budget amendments will be considered by Budget & Finance committee on Aug. 13 and continued before council on Aug. 18 when the council intends to consider final adoption.

Action and next steps: the public hearing was left open; the council did not take a final vote on the budget on Aug. 11. Additional budget deliberations and review of fee resolutions were scheduled for committee meetings and on Aug. 18. Staff said fee schedules and supporting materials would be posted online before the next committee session.