Norman staff present proposed FY2027 $302 million budget; council flags insurance subsidy and public-safety staffing shortfall

City of Norman finance staff on April 28 presented the city manager's proposed fiscal year 2027 budget, telling the City Council the total across funds is "about $302,000,000" and outlining next steps in the budget calendar ahead of final adoption scheduled for June 9.

The budget discussion, limited to the general fund and special revenue funds, reviewed revenue assumptions, reserve policies and a number of fund-specific items. The presenter summarized the all-funds picture: "the budget in total, we're talking about $302,000,000," and said staff had taken a conservative approach to sales-tax projections, assuming 1% growth for sales tax and 4% for use tax in FY2027.

Why it matters: staff said the city must balance capital needs, personnel and rising insurance and healthcare costs within constrained sales-tax revenue. Finance staff highlighted that the general fund budget for FY27 is roughly $112 million, with police (27%), public works (20%) and fire (19%) the largest general-fund expenditures.

Several council members pressed staff on reserves and risk exposure. Staff explained the reserve policy established in 2011 (amended 2019) that combines a 3% operating reserve and a 1% emergency reserve; staff noted the already-appropriated portion of the emergency reserve is "just over 1,000,000 dollars." The document projects the city will meet the minimum reserve level but remain below its higher target.

Insurance and benefits were a central focus. Finance staff told the council the FY27 budget includes a projected subsidy to the risk management fund of about $2,000,000, with approximately $1.5 million expected to come from the general fund: "we are gonna have to, pay about a $2,000,000 subsidy to the risk management fund that's included," a staff member said. Staff explained the city remains self-insured for healthcare and that a broker analysis indicated the city saves roughly $3 million a year by staying self-insured rather than buying a fully insured plan.

Councilors and staff debated the trade-offs between maintaining benefits, funding pay increases and hiring additional public-safety personnel. A prior public-safety study recommended dozens of additional firefighters and police officers, but staff said the flat sales-tax outlook constrains the ability to add positions. On the capital side, staff said moving or rebuilding Fire Station 5 remains a remaining PSST (public-safety sales tax) obligation; on the staffing side, building a station is largely a one-time capital cost while hiring and retaining about 15 firefighters to staff a station would add ongoing operating expense. As staff put it when discussing the cost to staff new stations: "we're gonna say 78,000,000 Dollars worth of capital" for station-related capital and emphasized the longer-term operating cost of personnel.

Other fund items reviewed included a voter-approved room tax increase to 10% (effective July 1) with allocations spelled out in the budget document; increased YFAC (Young Family Athletic Center) revenue projections after the city took over concessions; use of seizure and restitution funds to buy police vehicles, records software and to finance Pivot community intervention services for juveniles; and a public transit fund that projected revenues to exceed expenditures by roughly $600,000 in FY27, supported in part by federal transit grants.

What happens next: staff reiterated the schedule for additional hearings and study sessions (capital funds next week, enterprise funds later), a second public hearing and a planned adoption on June 9 unless the council requests additional review. No formal votes or amendments were taken at the April 28 study session.

Speakers quoted in this article are identified by their role as provided in the meeting transcript and are included in the article's speaker whitelist for attribution.