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O'Fallon unveils $136M preliminary 2026 budget, prioritizes streets and public safety
Summary
City staff presented a preliminary 2026 proposed budget totaling more than $136 million, a drop from the 2025 projection tied to one-time bond proceeds in 2025. The proposal increases street and road spending and preserves a sizable general fund reserve while flagging pressure from lower sales-tax receipts and possible state property-tax actions.
President Pro Tem called the Oct. 16 City of O'Fallon annual budget meeting to order and staff presented the City’s preliminary 2026 financial plan. City staff described anticipated 2026 revenues of more than $136,000,000 and said that figure is lower than 2025 projected revenues of about $190,000,000 largely because multiple 2025 bond issuances boosted last year’s totals.
The proposed budget, staff said, front-loads capital for roads and public safety. "In 2026, we are proposing more than $34,490,000 in street and road projects," the city administrator said, adding that the public-safety budget includes nearly $20,000,000 in proposed expenditures. Staff also reported the general fund unreserved balance is projected to exceed policy minimums, with a summary sheet showing a roughly 55% fund balance reserve compared with a 40% policy requirement.
Why it matters: City leaders said the plan aims to protect services while investing in infrastructure, but staff emphasized revenue risk. Finance staff noted lower-than-expected sales-tax receipts this year and warned of a possible property-tax freeze emerging from pending state action. "This budget incorporates significant capital investments aimed at meeting the city's needs and enhancing operational efficiency," the city administrator said, but also warned of outside pressures including reduced sales-tax lines and a change in franchise-fee revenue driven by state legislation.
Key details: The presentation itemized major revenue streams and policy decisions: property tax revenue is projected to rise about 3% in 2026; sales-tax receipts are budgeted conservatively after a year-over-year drop; the city expects use-tax and gross-receipts lines to be more variable. Staff said partner agencies and grants are expected to contribute roughly $13,780,000 toward the street-and-road work. The document notes several large capital projects and ongoing enterprise work for water and sewer that are carried over from 2025 construction encumbrances.
What officials said: Finance director Vicki Bosshert outlined major revenue drivers and statutory changes affecting franchise fees and telecommunication receipts. The city administrator told council the budget reflects the "guiding principles of fiscal responsibility, accountability and transparency." No new municipal tax was proposed at the meeting.
Next steps: Council members and staff will continue the review process at an Oct. 23 workshop where proposed additions or deletions will be handled. Staff repeatedly reminded council members that any new spending proposals must be accompanied by corresponding decreases elsewhere in the budget, per the mayor's stated policy.
Ending note: Staff asked council to treat the document as a working plan rather than a final appropriation; most departmental requests will return for further discussion, and formal adoption is scheduled as part of the regular budget process.
