Finance director projects $5.8M annual shortfall in multi‑year budget, commission flags cuts and fees

City Commission members and staff used a budget workshop to review a draft fiscal 2026 budget that staff said is balanced for next year but shows a growing structural shortfall in later years. Finance Director Les Tyler told the commission the city’s five‑year forecast now shows a recurring annual shortfall averaging about $5.8 million, up from an earlier five‑year estimate of about $2.1 million.

Tyler said the city should still adopt a balanced fiscal 2026 budget but must prepare a plan that blends expense reductions and revenue actions to avoid deeper deficits in 2027–2031. The workshop included discussion of storm‑damage reimbursements, capital requests and personnel costs.

Why it matters: the new projection reflects several converging pressures — slower assessed‑value growth and other revenue flattening; higher operating costs (insurance, contracted services and internal service fund charges); and added capital needs including storm recovery, wastewater upgrades and the Highlander Aquatic Complex. With a policy target reserve of 15 percent, staff said the general fund reserve is projected at 15.7 percent in 2026 but would…