East Troy reviews 2026 draft budget; board leans to keep capital levy while softening tax-rate impact

Brian, with the financial advisory firm Ehlers, presented the Village of East Troy draft financial management plan and the proposed 2026 operations and capital budget.

Brian said the village’s combined liquidity (general, governmental and enterprise funds) is above a comparative median but cautioned that planned sewer-utility expenditures will draw down utility reserves. He explained levy limits mechanics: net-new-construction is the primary local driver of allowable levy growth and is volatile from year to year. He used Department of Revenue data to show how small net-new-construction percentages translate into modest allowable-levy dollar increases in a given year.

Using a sample property, Brian illustrated that the recent revaluation (the “veil” or reassessment) increased assessed values sharply for many residential parcels; that revaluation alone will raise many residents’ village tax bills even if the village levy did not grow substantially. He said a sample property’s village portion of the tax bill increased roughly 8% in the example because its assessed value rose about 47%.

Administrator Eileen highlighted revenue developments in the draft budget: a larger-than-expected increase in transportation aids, stronger building-permit trends and conservative adjustments to investment income. She cautioned that the village has not yet received final health-insurance renewal numbers (the budget assumes an assumed rate increase), and the police union contract remains unsettled. She also noted PFAS settlement payments already received and that opioid-settlement distributions are expected to begin possibly next year but municipal allocations were not yet specified.

Staff reported an available additional levy capacity of about $34,500 that could be applied either toward capital projects or to reduce the tax-rate impact on residents. Trustees expressed a preference to try to preserve the approximate $400,000 capital levy target while using the available levy to soften tax-rate impacts on residents; final allocation would wait until outstanding items (airport CIP details, insurance renewals, and union negotiations) are clearer.

Trustees requested staff produce a concise KPI-style dashboard for future budget cycles showing fund-balance targets, debt ratios by funding source (TID, utilities, general), and a short metrics view for quick governance oversight.

Next steps: staff will finalize adjustments to the draft budget after final assessments, insurance renewals and any collective-bargaining outcomes and return with a revised budget for public review and adoption.