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City outlines FY2026 budget calendar and priorities; staff highlights reserves, debt and water-infrastructure needs
Summary
City finance staff presented an expanded budget calendar and an economic outlook Feb. 18, advising the council that healthy reserves and low debt provide room for investment while personnel costs and water/sewer infrastructure needs will shape next year’s choices. Staff flagged a multi-stage capital improvement process with an May 6 draft C
City finance staff on Feb. 18 presented the preliminary FY2026 budget calendar and an economic overview, asking the council for early input on priorities for capital and operating spending.
Calendar and process: Steven (finance staff) laid out an expanded calendar with several early opportunities for council input, including a May 6 draft capital-improvement plan (CIP) presentation and a mid-June pre-budget workshop ahead of the proposed-budget hearings that traditionally run in August and September. The fiscal year begins Oct. 1, and staff urged council participation on key dates to meet statutory requirements for adopting the budget.
Economic picture and constraints: Staff reviewed municipal cost and employee cost indexes, noting municipal inflation has fallen from post-pandemic highs while local employee compensation pressures remain elevated (the employee-cost index averaged just under 5% over the last three years). Preliminary certified property values were expected to be modestly higher (staff cited an early indication near 5%), and interest-rate outlooks for short-term investments were trending down slightly per staff projections. Staff described healthy reserves and relatively low tax-supported debt as giving the city flexibility to invest.
Budget priorities and pressure points: Staff highlighted water and sewer infrastructure needs and the upcoming water master plan (expected by year-end) as a driver of capital priorities. Council members urged staff to prioritize sidewalk-gap projects, neighborhood clean-up/anti-blight efforts, tree-trimming/preventive vegetation maintenance and a dedicated approach to utility-cut repairs. A councilor noted the city currently has a large number of open utility cuts (an operational figure cited as roughly 184–185) and asked staff to consider whether a permanent crew or a contracted approach would be more efficient.
Personnel and collective bargaining: Staff reminded the council that placement of Chapter 174 (Fire and Police Employee Relations Act) triggers a required process for fire bargaining and that personnel costs — including recent and planned police and fire pay changes — will be a major factor in FY2026.
Next steps: Staff will return with more granular revenue estimates once certified property values are issued in July, and requested council direction on capital emphases to shape the CIP draft for May 6. Staff said they will provide status updates on larger capital projects (municipal court, Memorial Auditorium work, library projects) in coming months.
