Finance Director Potts presented Shaker Heights’ revenue outlook and an initial timetable for the 2026 budget during a joint City Council and Finance Committee work session on Oct. 27, 2025.

Potts said the city is projecting 2025 operating revenues will reach almost $66,000,000, about $1,900,000 (roughly 3 percent) above the $64,000,000 budget adopted for 2025. He told council that 83 percent of the city’s operating revenue is derived from income and property taxes — “67 and 16 percent, respectively” — and credited real-time income-tax data and completed property-tax receipts for making the projection precise.

The finance director said the administration is proposing $65,600,000 in general-fund revenue for 2026, a few hundred thousand dollars below the 2025 projection and about 2.5 percent higher than the 2025 adopted revenue budget. “We have budgeted the 2026 general fund revenue number at 65,600,000.0,” Potts said.

Why it matters: income and property taxes account for the large majority of Shaker Heights’ operating revenues, so small percentage changes in those lines materially affect available spending for city services, capital projects and reserves. Potts told council he will present the expenditure side of the budget at a later meeting; whether the city ends 2025 with a surplus or deficit will depend on those forthcoming expense projections.

Key figures and assumptions presented

- 2025 operating revenue projection: nearly $66,000,000 (about $1.9 million above the adopted budget).
- Proposed 2026 general-fund revenue budget: $65,600,000 (about 2.5% above the 2025 revenue budget).
- Income taxes projected to make up roughly $45,000,000 of the 2026 revenue budget; property taxes about $10.6 million.
- Investment earnings: Potts reported a strong 2025 result (about $3.3 million projected for 2025) but recommended a more conservative $2.8 million budget for 2026.
- License and permit receipts in 2025 received a notable one-time boost tied to Woodbury permit fees; Potts said he does not expect that same level of receipts in 2026.
- Local Government Fund: administration’s expectation for 2026 was cited at approximately $980,000.

Potts described the administration’s timeline for budget work this fall and early winter: the council will review operating expenditures and transfers in November (including a Nov. 10 meeting for transfers), departments will present capital budgets Nov. 24, a final review will happen in early December, and the council is scheduled to adopt the 2026 budget and related legislation on Dec. 15.

Council questions and context

Council members asked for clarifications on several points. Ms. Coss asked whether recent property-tax increases included the effect of the homestead exemption; Potts replied that county-level changes and proposals were still in flux and that the county — not the city — would determine any homestead-exemption action. Council Member Moore asked about property-tax delinquencies; Potts said city collections historically come in “in the 90s,” meaning the city’s budgeted tax numbers have proven reliable. Mr. Maloney asked about the city’s investment practices; Potts described the city’s combination of laddered certificates of deposit, pooled-bank programs, and overnight sweep accounts and said those steps had materially increased investment earnings in the last two years.

Potts also reminded council that 2026 expenditure planning must account for the second year of five collective bargaining agreements, which will increase personnel costs.

What happens next

The finance director said the administration will present expense projections at an upcoming meeting and return with a full set of operating and capital proposals ahead of the Dec. 15 adoption meeting. Council members and staff said they will continue to review the revenue assumptions in light of forthcoming expenditure estimates.