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Council gives staff budget guidance: request scenarios at 3% and 5% growth, note healthcare and utilities risks
Summary
Councilors asked staff to prepare FY27 budget drafts using a 3% target while also modeling a higher scenario (5%) and to include enterprise/utility impacts; members warned that health-care costs and capital needs may make a 3% target difficult to achieve without service reductions.
City Manager Regina asked the council for direction ahead of FY27 budget development; the council discussed a 3% target for general-fund increase but requested staff provide alternate scenarios to show tradeoffs.
Councilors recalled last year's 3% guidance and noted staffing, health-care and enterprise-fund pressures. Elaine said 3% has served as a de facto target historically and recommended keeping it as a target while acknowledging it may be difficult to achieve. Others noted that a 3% budget target does not necessarily equal a 3% property-tax increase and that enterprise rate changes (water, sewer) can change overall tax/utility burden. Several councilors asked staff to prepare two scenarios (3% and 5%) and to show, for each scenario, what specific departmental changes would be required to hit that target so the council can understand service tradeoffs.
Councilors emphasized the need for clear, big-picture options rather than incremental "nickel-and-dime" reductions; Marcus asked staff to show the large-dollar tradeoffs needed to materially move the tax rate. Councilors also asked staff to include enterprise/utility forecasts and to surface near-term capital needs (public works, fire, wastewater treatment) that could affect bond conversations and the FY27 tax rate. Regina confirmed staff will provide budget and work-plan instructions to department heads with a target range and present scenario analyses to the council.
No final appropriation was made; staff will return with scenario budgets and supporting analyses for council review during the FY27 process.
