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Birmingham releases recommended FY2026 budget with lower millage, $30.1 million in capital projects
Summary
City Manager presented a balanced FY2026 recommended budget that reduces the operating millage to 13.1183 and proposes $30.1 million for capital projects, with $18.4 million targeted to streets, water and sewer.
City Manager presented a recommended FY2026 operating budget the commission heard at a public hearing, saying the plan is balanced while lowering the city's operating millage to 13.1183 — 0.1478 mills below last year's levy.
Finance Director Mary outlined the details, saying the city is proposing a $125 million overall budget and a capital program of $30,100,000 for FY2026. "Out of the $30,100,000, $18.4 million, or 61 percent, is allocated to streets, water and sewer improvements," Mary said.
The recommended budget keeps the city's unassigned/general fund balance high (Finance Director Mary said the current balance is about 38 percent) and maintains a policy gap of 0.3 mills below the Headlee limit to preserve future flexibility. Mary told commissioners the budget book and line-item detail are available on the city's OpenGov portal and reminded the commission this hearing solicits comment before a final vote expected in late May or early June.
The proposal includes three personnel changes the city manager highlighted: a utility specialist for water/sewer/street work, a full-time position supporting the ice arena and golf course, and converting a part-time transcriptionist position to full time to handle meeting minutes and administrative support for planning and engineering.
Budget watchers and commissioners pressed staff on several revenue and cost categories. The finance director pointed to projected growth in taxable value (about 6.5 percent overall, driven by Proposal A assessment adjustments and uncapping) and said that growth offsets the lower millage; she estimated an average residential annual tax change of about $80 under the recommended rate. She also noted that not all property-tax dollars are retained by the city: roughly 34 cents of every property-tax dollar goes to the city, while other shares go to the county, state education and the school district.
On timing and scope, the city manager emphasized the FY2026 recommendation is only for the coming fiscal year and that the budget book shows a three-year operating view and a six-year capital improvement plan for planning purposes.
The commission did not take final action at the hearing; staff said they will return in late May/early June with a vote-ready budget ordinance for the commission.
Ending
The public hearing record remains open while the city compiles any public comments taken at the numerical-section breaks that were part of the meeting format. Staff said they will incorporate input from the hearing and return in late May or early June for the commission's formal adoption vote.
