Augusta officials outline 2026 budget shortfalls and hard choices, warn of $6–7M health‑care hit

Interim Finance Director Tim Schreier told the Augusta City commission at a June budget retreat that the city faces a multiyear budget squeeze that will force “tough decisions” for the 2026 fiscal year, including possible cuts to services, personnel reductions or a property tax (millage) increase.

Schreier said general fund revenues are projected to fall from $127 million in 2024 to about $118 million in 2026 as one‑time American Rescue Plan Act (ARPA) dollars are no longer available. He said the city currently has about $3 million in ARPA funds remaining that must be spent by the end of 2026.

“The next one is health care costs,” Schreier said. “EPIC is projecting that we’re gonna have a 20% increase in our cost from last year, and that's about 6 to $7,000,000.” He said the projected health‑care overage is across all funds and that the city expects to file stop‑loss claims that could reduce the net exposure.

Why it matters: the general fund is the portion of the $1.3 billion city budget that pays for day‑to‑day services; Schreier said the general fund is about $200 million. He warned commissioners that, absent new revenue, the city will need to either reduce expenditures, cut personnel or raise the millage rate to maintain current service levels.

Schreier and Administrator (name not specified) walked commissioners through the mechanics and timing of the budget process: department submissions in summer, review by finance and administration, public input in July, a formal presentation in October and adoption in November with an effective date of Jan. 1. Schreier said revenues through April were “6% over our budget” for sales tax and TAVT collections but cautioned those early gains may not persist.

Staff identified several major cost pressures that will shape 2026 decisions: - Health‑care claims: a projected 20% year‑over‑year increase driven by a larger number of high‑cost claimants (Schreier said eight high‑cost claims this year vs. five last year). - Streetlights: a projected $2.1 million deficit in the streetlight special revenue fund, and a planned Georgia Power audit estimated at $540,000 to inventory and evaluate which lights the city owns and options to transfer ongoing costs to a third party. - Public safety personnel costs: the sheriff’s office is running personnel overages tied to filling positions; vacancies fell from about 205 last May to about 110 this May, increasing payroll pressure even as overtime stays high. - ARPA revenue replacement: city officials and commissioners discussed that roughly $7.3 million of ARPA funds were used in recent budgets to replace recurring general fund revenue, and phasing that out creates an ongoing gap.

Staff presented three broad approaches to close the gap: find new revenue (including a millage increase), reduce spending (across‑the‑board or targeted), or a combination that could include one‑time measures. Schreier offered numerical context: a roughly $7.2 million shortfall could mean a 3.9% across‑the‑board reduction in general fund spending or, alternatively, eliminating an estimated 112 full‑time equivalent positions (using a broadened average position cost).

Commissioners pressed staff for follow‑up detail: requests included a line‑by‑line list of positions funded by ARPA, a clearer breakdown of the projected health‑care exposure and further analysis of enterprise fund contracts that might yield savings. Administrator (name not specified) told the commission staff will deliver the requested breakdowns and post updated materials on the city website.

Ending: Staff said they will hold community input meetings and post the updated packet online; commissioners signaled they expect further work sessions and data before final decisions on balancing the 2026 budget are made.