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General Committee reviews FY26 draft budget showing $830,000 operating shortfall; public safety remains top priority
Summary
City staff presented the draft FY26 operating budget, reporting an $830,000 general-fund deficit before further adjustments. The presentation highlighted rising health insurance, pension and communications costs, continued paving and public-safety vehicle replacements, and scheduled a second budget workshop for May 5.
City staff presented the draft fiscal year 2026 operating and special-fund budgets at the General Committee meeting on April 8 and said the current draft shows an approximately $830,000 deficit in the general fund before additional adjustments.
Jesse Eckeneroff, chief of operations, and city finance staff led the presentation and outlined the factors pushing the operating budget into the red: a roughly $200,000 increase in the ECC (the 9-1-1 communications center), about $100,000 higher property-liability insurance, an estimated $600,000 increase for employee health benefits (initial estimate at 15%), and roughly $80,000 associated with an increase in the state pension contribution rate. City staff said those four items combined account for nearly $1 million in additional cost beyond the department-submitted budgets.
Staff reported modest revenue adjustments since the first workshop, including a $25,000 increase in parks fees, a $25,000 reduction in beer and liquor tax revenue, and an approximately $73,000 month-to-month sales-tax increase compared with last year. Overall revenue is projected to be up roughly 2.28% year over year, and staff said they expect local sales tax for the year to finish just north of $22,000,000.
The presentation emphasized that public safety is the largest portion of the operating budget: police and fire together constitute over half of total operating expenditures and account for about 75% of salary and benefit costs. Budget priorities carried forward from the first workshop include maintaining low property-tax rates (no proposed change), balancing recurring revenues and expenditures, reducing outstanding debt, and continuing a paving program. The draft includes about $7,500,000 for paving in total: $2,700,000 from the general fund, $1,000,000 from State Street Aid and $3,700,000 from the PIP (special projects) fund.
Public-safety capital needs discussed include one fire engine in the proposed budget and replacement of hoses and hose racks, plus a total of 13 police vehicles allocated in the draft. Staff said lead times for replacement apparatus can be long (multiple years for fire apparatus) and estimated a fire-engine purchase could be part of a roughly $3,000,000 outlay spread across years. Committee members expressed support for replacing worn police vehicles as officers are hired and urged flexibility to amend the budget during the year to avoid putting officers in unsafe vehicles.
Staff outlined special-revenue funds and said the PIP fund is being budgeted down to spend the projected fund balance on previously promised projects; the draft budgets include equipment purchases for police and parks and a $2,000,000 city share for a potential Land and Water Conservation Fund-type grant (LPRF) application that could leverage additional grant and land-value matches. The hotel-motel fund shows slightly lower projected revenues and a modest carryover; State Street Aid and stormwater funds are largely status quo with planned spending on eligible projects.
Staff said they would continue working with the mayor and department heads to trim discretionary items and aim for a balanced operating budget. The committee scheduled a second budget workshop for May 5 to review updated operating and special-fund details and rolled projects.
No formal budget vote occurred at the meeting; staff requested feedback and directed follow-up work on health-insurance options, grant applications, and project rollovers.
