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City manager presents $138.9 million all-funds budget proposal; council debates fund balance and tax relief
Summary
City Manager and budget staff presented a proposed all-funds budget of $138,931,917 and a general-fund plan that would increase from the current adopted level; councilmembers pressed for options to return some one-time gains to taxpayers and requested deeper review sessions.
Gary Coase, Petersburgs budget manager, presented the citys proposed FY202526FY2026 all-funds budget at the April 1 work session and described the recommended starting point for council review and upcoming meetings with council members and the public.
Coase said the proposed all-funds total is $138,931,917 and identified the general fund as the primary policy lever. The proposed general fund revenue figure is about $104 million, up from the current amended fiscal-year budget and the $96 million figure previously adopted for FY2025. The proposal assumes current tax rates remain unchanged; any rate changes would be a separate council decision.
Councilmembers sought clarity about the recent increase in the citys fund balance. Finance staff explained the FY24 year-end fund balance rose by roughly $9.0 million because the city collected about $6.0 million more in revenues than budgeted and spent roughly $2.0 million less than planned. Salary and fringe "savings" together contributed roughly $2.5 million of that difference, finance staff said.
Council members asked whether the extra funds should be returned to taxpayers, with Councilman Koeppler arguing for lowering real-estate tax rates by a penny and others urging targeted spending on seniors, blight remediation or workforce pay. The city manager said the administration will not immediately channel all new or projected revenue into operating spending; instead, administration plans to hold and allocate some increases among capital, schools and reserves and to present options during budget work sessions.
Council discussed next steps: the manager will schedule one-on-one and small-group budget review meetings with council members, community meetings and a public Citizens Academy-style briefing to walk residents through how the budget works. No appropriation vote was taken at the session; council will consider the final adopted budget in later meetings following review and public input.
Why it matters: The budget frames city services, staffing, and capital projects; council debate highlighted competing priorities between immediate tax relief and reinvestment in city programs and infrastructure.
