Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Budget topic
No spam. Unsubscribe anytime.
City presents proposed FY2026 budget: flat overall revenues, police and fire pension funding changes and a 15% fire-fee increase
Summary
City finance staff presented the proposed fiscal year 2026 budget at the Feb. 25 Committee of the Whole, forecasting stable overall revenues but warning of a potential municipal sales-tax decrease tied to state GIS boundary changes and reporting steps to fund police and fire pensions.
A city finance presenter briefed the Committee of the Whole on Feb. 25 on the proposed fiscal year 2026 budget and major revenue and expenditure assumptions.
The presenter said overall general-fund revenues are expected to remain relatively flat year-to-year (proposed general-fund revenue about $39.4 million). Key revenue points included property tax (about 12% of general-fund revenue historically) and business-and-occupation taxes (combined B&O regular and construction taxes represent roughly 41% of general-fund revenue).
The presenter warned the council that a statewide change in how municipal sales-tax boundaries are calculated — moving from ZIP+4 to GIS parcel-level boundaries — could reduce municipal sales-tax receipts by as much as 10% in the first year of implementation (anticipated July 1, 2025). The municipal sales-tax fund is allocated by ordinance across four uses; the FY2026 proposal would direct the formerly pooled retirement allocation into direct, split contributions to the police and fire pension plans (12.5% each).
To address police and fire pension funding, council previously approved closing the city’s legacy police and fire pension plans to new entrants as of Jan. 7, 2025; employees hired on or after July 1, 2025, will join the state plan. The presenter reported the combined unfunded pension liability for the two legacy plans is approximately $113.6 million and said the budget will use municipal sales-tax allocations and a one-time employer contribution from the retirement fund to invest in the pension plans.
The budget includes a one-time 15% increase in the municipal fire protection service fee for FY2026 to cover the city’s required minimum employer contribution to the fire pension fund and rising fire-department costs. The city did not budget an increase in employer health-insurance contributions for FY2026 but is monitoring rising claims and stop-loss reimbursements; officials said stop-loss payments recently began arriving and January–February claims trends were declining.
The presenter also noted planned capital projects, agency funding allocations (including $624,000 in opiate-settlement distributions across 13 entities) and proposed operating budgets. The proposed general-fund contingency was set at $400,000, $200,000 less than the prior year due to capital-escrow needs.
Councilors asked timing questions about the GIS sales-tax change and sought clarifications about program and pension funding; staff said budget revisions will be brought forward if construction-related B&O or other large revenues materialize during the fiscal year.
