Commission hearing on budget: staff presented financial picture; commissioners direct balanced budget without using reserves
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Summary
City staff presented the FY2025 financial status and budget timeline. Commissioners directed staff to prepare FY2026 budget options that do not rely on reserves, asked for benchmarking against peer cities, and expressed a preference to hold the millage rate steady while staff explore revenue and expense options.
City staff led a detailed fiscal overview and timeline at the June 10 meeting and commissioners used the presentation to give direction for the FY2026 budget process.
City Clerk Jeanette Smith and City Manager Jonathan Hayes summarized fund structure, revenue sources and the adopted/amended fiscal‑year budget across funds. Staff presented that the total amended budgeted expenses across the city’s funds were approximately $169 million and total budgeted revenues were approximately $139 million, with a budget gap of roughly $29.8 million to be addressed using reserves in the current amended budget. Staff explained that some reserves—particularly grant and capital reserves—are rolled forward by requirement and some reserve uses are discretionary.
Commissioners pressed staff to produce a FY2026 budget that does not rely on reserves to balance recurring operating expenses. Several commissioners said they want department heads to identify concrete cost-savings options and to benchmark key services and costs against comparable cities. Commissioners discussed but did not adopt any tax-change proposals; there was expressed support for holding the current millage rate steady as the starting point for the budget process. Several commissioners also asked staff to research potential revenue adjustments such as expanding merchant-fee coverage (for example, to additional categories of sales now excluded) and to provide comparative metrics showing how other cities deliver services and manage parks and operations.
The commission scheduled a formal budget workshop for July 24 to set the proposed millage-cap and begin department-level budget conversations, with tentative and final millage hearings to follow in September. Staff were directed to return in July with a balanced budget scenario that does not depend on reserves, options for replenishing reserves, and benchmarking data as requested. Commissioners noted long-term obligations tied to debt and capital projects, including a $150 million loan used to fund a multi-year capital program, and emphasized the need to examine debt-service structure and alternative funding sources.
