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Finance presents FY2027 budget highlights; late Five Flags update trims recommended tax rate
Summary
Finance staff reviewed FY2027 budget tools and projections, proposed modest utility fee increases, and reported a late reduction in the Five Flags subsidy request that reduces the recommended city tax rate from $10.16 to $10.13 per $1,000 assessed value; staff forecast general fund reserves at ~27% and emphasized the creation of a state‑legislative anticipation reserve.
The Finance Department presented its FY2027 budget request Thursday, walking council through online engagement tools, proposed rate adjustments and updated assumptions used to estimate tax and utility impacts.
Jennifer Larson, chief financial officer, summarized the city’s budget responsibilities for an approximately $265 million budget and described public engagement tools available to residents, including an online property‑tax impact estimator that lets homeowners enter assessed values to see changes by taxing body.
Larson proposed modest utility changes for a typical residential meter (3,200 gallons/month): a 3% increase to water and larger increases (9%) in sanitary sewer, refuse and stormwater that together would raise the monthly utility bill by about $6.77 for the sample consumption. She also noted the city’s low vacancy and healthy online payment metrics.
Late in the meeting staff reported a reduction in the Five Flags Operating Group subsidy request after OV G revisited its FY27 projections; the revised recommendation reduces the city’s proposed tax rate slightly—from $10.16 to $10.13 per $1,000—cutting the previously announced levy increase from 10 cents to about 7 cents per $1,000. Larson said the change was provided after budget documents were printed and the administration will include the update in the revised budget recommendation for the final hearing.
Finance also reported significant workers’ compensation improvements; the city’s mod factor fell from a high near 1.3 to a projected 0.85 in FY27, reducing expected general fund workers’ compensation cost and producing estimated savings of roughly $198,272 in FY27. Larson outlined debt metrics and said statutory debt usage is projected around 33% under the recommended budget.
Larson proposed creating a state legislative anticipation reserve funded by repayment of internal TIF loans (about $2.64 million) to hedge against potential state property‑tax reform proposals. She cautioned that any reserves used before 2028 should finance only non‑recurring expenses.
Ending: Finance will submit a revised recommendation, including the Five Flags update, at the final public hearing. Councilmembers asked for further detail on reserve impacts and analysis of administrative overhead allocations.
