Mayor unveils FY2026 executive budget; council sets public hearings for August

Mayor Andrea Davis presented the City of Missoula's executive budget for fiscal 2026 on July 21, reporting a smaller-than-expected 2025 outturn, a reduced structural deficit and a combination of non-tax strategies to close remaining gaps. The council set public hearings for the budget and associated resolutions on Aug. 4 and Aug. 11 and directed staff to return for final adoption on Aug. 18.

Davis said disciplined fiscal management and stronger-than-expected revenues will leave the city's cash reserves about $3.1 million at the end of FY2025, roughly $1 million higher than anticipated. The mayor said the budget reduces the structural deficit from approximately $3.1 million to $2.4 million and noted the city still needs about $1.9 million to meet a 7% ongoing-revenue cash-reserve target (estimated at about $5.1 million).

The presentation outlined revenue and savings examples the administration used in crafting the FY2026 executive budget: a planned increase in the city's property-insurance deductible (estimated $75,000 annual saving), projected short-term-rental registration revenues of roughly $200,000 annually, new health-department licensing revenue of roughly $120,000 a year from statutory changes, and information-technology contract savings around $100,000 annually. The mayor also said the administration intends to close the temporary Johnson Street emergency shelter, producing an estimated $1.8 million in annual savings.

The executive budget anticipates total expenditures across the general fund, road and park districts and the fire levy of $121,460,959.23 for FY2026. The 3.5% projected increase in property-tax and assessment revenue for FY2026 (about $4.4 million) is planned to fund wage and contract increases, limited new staffing and department priorities; staff cautioned that the final fiscal impact depends on certified taxable values issued by the Montana Department of Revenue on Aug. 4.

Finance and administrative staff described additional non-tax strategies, including use of state gas-tax funds to pay for two new street-maintenance positions (rather than higher road-district assessments) and a proposed remittance from the Missoula Redevelopment Agency for eligible infrastructure expenses. The mayor and CAO emphasized the plan prioritizes maintaining essential services, limiting new property-tax burdens and using grants or one-time funds for special housing-related positions and investments.

Councilor Sheryl (budget and finance chair) noted dates for committee deliberations and requested amendments be submitted by Aug. 4 so staff can compile and analyze them. The council approved by voice vote to set public hearings for Aug. 4 and Aug. 11 on the FY2026 budget, the community-improvement program (CIP), proposed fee resolutions and district work plans; final adoption is expected Aug. 18.

The budget presentation and supporting documents were made publicly available on the city website and finance staff said they will provide additional committee briefings and data ahead of the hearings. Council deliberations in the Budget & Finance Committee were scheduled for July 23, July 30, Aug. 6 and Aug. 13.