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City managers present balanced but constrained 2026 budget forecast; net new construction limits levy growth to about 1%
Summary
City Manager Joe Moore and Director of Administration Tricia Davey presented the 2026 budget overview, forecasting roughly 1% net new construction (limiting levy growth to about $270,000), discussing the wage study, expenditure restraint program, capital projects and use of excess TIF increment.
City Manager Joe Moore and Director of Administration Tricia Davey presented the administration’s 2026 budget overview to the Fond du Lac City Council on June 25, saying they will deliver a balanced budget in August but with limited flexibility.
Moore said the city is forecasting about 1% net new construction; Davey explained the state formula means the tax levy can increase by approximately that amount and that translates to roughly $270,000 of allowable levy growth under state rules. Davey noted that about 77% of the city's revenues are in the category the city has little control over (tax levy and state aids), leaving limited flexibility for new spending.
They reviewed key cost drivers: personnel costs are the largest operating expense, and a recent wage study of 157 positions found 84% of positions were within 3% of the market, with remaining gaps addressable and judged affordable. Davey described the state's Expenditure Restraint Program (ERP) as an important constraint on spending growth but an incentive to qualify for about $1 million in state aids; she warned that opting out of ERP would create a significant revenue hole.
Moore and Davey also discussed capital priorities and said excess TIF increment from the recently closed South Industrial Park TID would be earmarked for capital improvement funds to offset borrowing. The council asked questions about how net new construction is calculated, placeholders for union negotiations, and the effect of fee-funded programs on ERP; staff explained calculations come from Department of Revenue data and that fee-funded spending still counts toward ERP’s expenditure calculations.
Moore said the administration expects to present consultant findings from the wage study on July 23 and will deliver a balanced 2026 budget in August. He emphasized the city is in a strong fund-balance position compared with earlier years but that available flexibility is limited under current statutory constraints.
