Finance director previews fiscal 2026 budget, warns of $2.3 million adjustment need by 2028

Finance Director Bridal Wood presented the city’s initial fiscal‑2026 budget update, describing current revenue collection, fund balances, valuation changes and a timeline for upcoming budget and levy hearings.

Wood said the city has received about 53% of budgeted property taxes and other city tax revenue is at roughly 52% of expectations for the fiscal year. She summarized general‑fund expenditures for fiscal 2025, noting 45 cents of every dollar went to public safety and the unassigned general‑fund balance stood at 37.1% as of June 30, 2024. "Our actual fund balance for the general fund was a little over $41,000,000 with the unassigned being the $27,000,000," Wood said.

She reviewed the budget process and timeline: department capital improvement meetings are complete, personnel budgets were prepared using fiscal‑25 staffing levels, and departments were asked to avoid adding new spending requests while the city addresses levy pressures. Key dates Wood outlined included setting a pre‑levy bond hearing date and holding the statutorily required separate public hearing to propose tax levies (the city plans to set the levy hearing date and hold the hearing in April to meet state filing deadlines).

Wood also summarized property‑tax rollback changes for fiscal 2026: the residential rollback rose to about 47%, agricultural rollback increased modestly, multi‑residential properties are taxed at the residential rate and commercial/industrial/railroad classifications receive the residential rate on the first $150,000 and 90% thereafter. She said taxable valuation rose about 3% overall, while certain homestead and military credits doubled in total dollars, reducing taxable base in some categories.

Council members asked how recent revenue losses — including automated traffic‑enforcement (ATE) receipts — and new local option sales tax timing affect the city’s budget targets. Wood said the city still projects a modest levy growth (about 1.97% providing roughly $400,000 more than last year) but must plan to reduce the levy by about 0.81 points by fiscal 2028, equivalent to approximately $1.8 million. She summarized the current 'bull's eye' of about $2.3 million the city needs to address.

Wood said staff have been communicating with state legislators and regional coalitions about the fiscal impacts of state actions on local budgets. She recommended departments look for revenue increases and expense reductions and noted staff would present more detailed levy and budget options in later sessions prior to the April final budget hearing.

No final levy or budget adoption occurred at the work session; Wood's presentation set the schedule for public hearings and asked council to submit any alternative budget ideas by Feb. 19 so staff could incorporate them before state filing deadlines.