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City manager presents draft FY2026 budget with no proposed tax-rate increase; staff recommends investments in utilities, schools and housing planning
Summary
City staff presented a balanced draft FY2026 budget with no new tax rates proposed, increased transfers to schools, investments in water and sewer infrastructure, a 4% employee pay proposal, and funds for a housing policy analysis and Parks & Rec master plan; public hearing set for April 22.
HARRISONBURG — City management presented the draft fiscal year 2026 budget to city council on April 8, proposing no change in the city’s tax rates and a package of targeted investments and fee adjustments.
City Manager (presenter) and Finance Director Probst outlined highlights: a proposed all‑funds city budget of about $416.5 million; an estimated $7.2 million investment in water and sewer infrastructure to address aging systems (to be funded by utility rates and enterprise funds); a proposed 4% pay increase for city employees (about $2.4 million); a $1.46 million increase in the city’s general‑fund transfer to schools; and $3.6 million in investments in school facilities. The budget also proposes a decrease in the monthly sanitation fee for households (from $24 to $21) and modest utility rate changes: water base rate proposed to rise from $21.05 to $22.20; sewer for 5,000 gallons from $31.85 to $32.65; and a small stormwater fee increase to help meet upcoming regulatory obligations.
The proposed budget includes one new full‑time facility position for Public Works given the city’s growing facility portfolio, continued funding ($400,000) for civic/community organization grants (44 organizations recommended for funding from 46 applicants), and funding to support several council priorities including a Parks & Recreation master plan, an aquatics dome feasibility step, and a housing policy technical analysis (potentially via a Virginia Housing grant) to explore financing options for affordable housing. Staff emphasized the budget is balanced and that some federal funding streams and investment income are uncertain.
The city will advertise the proposed tax rate (which remains at the current rate: $1.01 per $100 of assessed value and the existing personal-property rates) and hold a public hearing on the budget on April 22. The council may amend the budget in subsequent meetings; the charter requires a final adopted balanced budget by May 31.
City staff said the budget will be posted online and a budget-in-brief will be published; staff also noted the RAISE and VDOT grant supplemental appropriation on the same agenda to begin design work for Liberty Street and other pedestrian improvements.
