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Council wrestles with mill-levy options; directs staff to find cuts and moves Project Grad funding to drug-and-alcohol fund
Summary
City staff presented a 2026 budget forecast showing a falling general fund balance and options tied to the revenue neutral rate. Councilmembers debated cutting the mill levy by a quarter mill, directed staff to identify $93,000 in reductions, and agreed to move $3,000 for Project Grad into the Special Alcohol and Drug Fund.
City finance staff presented an overview of the proposed 2026 budget and five‑year financial forecast and recommended the council consider whether to exceed the revenue neutral rate and set a public hearing. Matt (finance staff) told the council the city's target General Fund balance is 30% of expenditures; the fund balance was about 40% at the end of 2024, is projected at 33% at the end of 2026 and falls toward the target in the forecast years.
Why it matters: the council must decide whether to capture assessed valuation growth by keeping a flat mill rate, or to lower the mill rate (for example by the revenue neutral rate) and accept lower future General Fund balances. Either outcome has trade-offs for service levels, capital capacity and longer‑term tax requirements.
Matt walked the council through scenarios: holding the mill levy flat would keep 2026 fund balance near 33%; using the revenue neutral…
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