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Council hears preliminary FY26 budget: staff flags revenue gains, $104K base gap and options
Summary
Staff presented an early FY26 budget preview showing projected general-fund revenues of about $13.18 million, a conservative $965,000 revenue increase estimate, a $104,000 gap for base plus maintained services (rising to $503,000 if new service requests are included), and options including modifying the over-65 exemption, a $5/month stormwater fee (projected ~$300,000/year), and redistributing certain sales-tax funds.
Finance staff presented a preliminary look at the townbudget for FY26, emphasizing a conservative approach while noting several revenue opportunities and pending uncertainties. Staff said the town currently projects $13.18 million in revenues and identified a $104,000 gap between projected revenues and base plus maintained service costs; adding new service requests would widen that gap to about $503,000.
Staff walked through major revenue categories: property tax (the largest source), sales tax, franchise fees and charges for services (including police contracts with Harvest and DISH). At the time of the briefing staff reported about 54% of properties were in protest with the appraisal district, which led them to model a conservative $450,000 increase in property-tax revenue; staff said final appraisal values are expected by late July and the figures could be trued up.
On expenditures, staff proposed personnel adjustments — a 3% cost-of-living increase, a market adjustment and step increases — and described department requests across administrative services, municipal court, finance (one new purchasing/accounting clerk), development services (impact-fee studies and a business gift-card program split between EDC and CDC), public works (equipment, vehicles, a third street-striping crew position, and OpenGov permitting software), and police (two corporals, equipment, and a school resource officer with the school district paying 70% of the cost).
Staff identified optional revenue or policy choices for council consideration: modeling the fiscal impact of increasing the over-65/disabled homestead exemption (current exemption cited as $100,000), considering a $5/month stormwater fee projected to raise about $300,000 annually, and evaluating sales-tax distribution or forming a municipal development district. Staff committed to returning with more-detailed modeling and cost-benefit analysis for items council requested.
Council asked for additional detail on maintained-service cost increases and asked staff to model the over-65 exemption impact at a future meeting. Mayor and council emphasized prioritizing new services and exploring competitive procurement options for large one-time items (for example, the ADA study). Staff said they would adjust estimates as appraisal data and billing information arrive.
