Galena proposes FY27 budget with $2.27 million deficit, schedules April 13 public hearing

City Administrator Matt Olenberg presented the City of Galena’s proposed Fiscal Year 2027 operating budget at a special council work session, outlining an overall shortfall of $2.274 million and a general fund deficit of $922,130 while saying the city does not plan cuts to public services.

“We have no planned reduction of public services,” Olenberg said as he laid out revenue and expenditure projections. He told the council the city projects about $13.5 million in revenues and roughly $15.78 million in expenditures, with property tax revenue of about $1.59 million included in that total.

Why it matters: the proposed budget seeks to spend down reserves to complete capital projects that carried over from prior years and to fund new initiatives, including a borrowing proposal tied to a building purchase on Dan Street. Olenberg said the city will seek to preserve minimum fund balances and pay down debt service where possible.

The budget includes personnel and capital commitments that drive the shortfall. Olenberg said the city plans to fully fund existing employee positions and add a full-time director of the fire prevention bureau, while continuing to staff police and public works positions. He listed several capital items contributing to the deficit: $120,000 for sidewalks, $150,000 toward a bicentennial playground project, about $202,000 for a new police building component, a $150,000 end loader, and roughly $260,000 in carryover general-fund projects.

Olenberg also told the council the city expects to reduce the property tax levy rate, estimating about a $28.30 decrease per $100,000 of assessed value. He said no other tax or fee increases are currently planned.

On the schedule, Olenberg said the council will hold a public hearing on the proposed budget at its April 13 meeting and could take action that night; if the council does not adopt the budget then, another meeting date would be April 27 before the fiscal year begins.

Council members asked about the budget’s sensitivity to state policy changes. A council member raised recent proposals from Springfield that could alter revenue sharing and the motor fuel tax; Olenberg said staff use municipal league projections and that the city’s MFT (motor fuel tax) reserve could help absorb short-term changes. He also said staff will present more detail if state action materially alters projections.

The council was also told staff are preparing a water and sewer rate study and monitoring garbage contract costs (Olenberg estimated the city is currently absorbing about $7 per household per month to avoid raising rates immediately). No rate changes were included in the FY27 revenue base presented to the council.

Next steps: the council will receive public testimony at the April 13 hearing and could vote on the budget at that meeting; if not approved the item will return for consideration on April 27.