Council hears FY27 budget proposal showing $10.5M expenditure increase; public hearing set for May 18

Deputy Chief Financial Officer Jared Thulen and Budget Manager Seth Hughes presented the City of Stillwater's proposed FY27 operating budget to the City Council on April 20, outlining revenue drivers, expenditure increases and next steps.

The presentation covered budgets for the City, the Stillwater Utilities Authority (SUA), the Stillwater Economic Development Authority and the Stillwater Public Works Authority. Thulen said the public hearing on the budget is scheduled for May 18 and final adoption for June 1; the new fiscal year begins July 1. "We are here this evening to present the FY27 proposed operating budget," Thulen said.

Seth Hughes detailed revenue and expenditure assumptions. He said the general fund shows an estimated increase of about $3.8 million (driven primarily by sales and use taxes) and the SUA fund shows an increase of about $3.6 million tied to the council-approved five-year utility rate plan. Hughes said sales tax growth in the general fund accounts for roughly $1.8 million and projected use tax growth of about $1.1 million. On utilities, Hughes said water and wastewater increases amount to approximately $22,500,000 and waste management about $1,200,000; electric sales are projected to rise by about $1,000,000 but are offset by other line items.

Hughes also noted restricted and designated funds total $72,700,000 (about 41% of total revenues) and that a meaningful portion of the expenditure increase ($10.5 million year-over-year) is driven by debt service, including debt to repay the 2025 FAP loan for water and wastewater projects.

Councilors pressed staff on reserve balances and the transportation sales tax fund. Councilor Clark asked why the airport reserve showed a $0 balance against a target of $3 million; staff explained much of that funding has been used to match federal grants for the terminal project and that appropriations will be identified and carried forward as projects are ready. On transportation sales tax, Hughes said roughly $10.6 million of new revenue is projected for FY27 and that the fund currently has a beginning balance of about $26.5 million to be allocated as projects are prioritized.

Finance staff said they are conservative in revenue projections and will return to council for amendments if needed. "We'll be back on May 18 for a public hearing, and then we'll be back on June 1 for official adoption," Thulen said, describing the remaining steps.

The presentation closed with staff noting positive budget outcomes, including $500,000 committed for vehicle purchases and $250,000 for software upgrades, and with council thanking staff for the work. The council took no action on the budget that night.