Battle Creek commission reviews draft fiscal 2026 budget; staff proposes small use of fund balance and minor millage cut

Interim City Manager Ted Deering and finance staff presented the City Commission with a proposed balanced fiscal year 2026 budget Tuesday that includes a minor millage decrease and a small planned use of fund balance.

The draft budget proposes an overall city millage of 15.57 mills, down 0.095 mills from the prior year, and anticipates using about $248,000 of the general fund balance to balance FY26. Deering said staff recommends the rate change and described the FY26 plan as balanced while noting a shortfall risk in the downtown parking fund.

The presentation put several key figures on the table. Aaron (finance staff) said fiscal 2025 estimates now show an addition to fund balance of $1,044,041 compared with the adopted budget, driven in part by income tax receipts projected to come in about $567,000 over budget and interest income roughly $722,000 over budget. Staff included a $2,000,000 transfer to the capital improvement (401) fund in the FY25 estimates and shows a projected unassigned general fund balance of about $13.1 million (20.9% of estimated revenue) as of June 30, 2025. Under the FY26 proposal, staff projects an ending fund balance of roughly $16.25 million if revenues and expenses are realized as planned.

Why it matters: the millage proposal would lower the city portion of property taxes slightly (staff estimated about a $10 decrease for a home with $100,000 taxable value) while continuing transfers…