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City budget preview keeps 35% general fund reserve, shifts transfers to capital and services
Summary
Financial staff proposed a fiscal 2027 budget that retains a larger-than-usual 35% general fund reserve, continues multi-year transfers to library, cemetery and airport funds, and anticipates bonding to buy a city building; officials raised questions about staffing and grant timing.
The city’s financial services director presented the proposed general fund and capital budget, saying the administration will hold a 35% general fund reserve to protect operations against revenue drops and avoid layoffs. “We’re going to save it and make sure that we have a good solid reserve balance to move forward,” the director said.
The move raises the city’s precautionary cushion above common practice: staff noted a prior recommended reserve of about 16.67% and a recent practice of maintaining roughly 25%, but said council discussion led to the 35% target for the coming year. The director added, “35% really makes me happy,” framing the higher reserve as a tool to preserve services in economic downturns.
In the presentation, staff described multi‑year transfers from the general fund that began in 2025 to build reserves for large projects. These transfers include operating support for the library, a subsidy for cemetery operations (which the director said brings in little revenue beyond burial fees), and variable subsidies for the airport depending on fuel sales and other activity. On the capital side, staff explained the capital improvement fund is used for citywide projects that do not belong to a single department and is funded in part from sales tax receipts.
Debt and financing were also discussed. Staff reported roughly $35 million in remaining principal on a set of loans and noted that a final payment is scheduled for July 1, 2027; they said the city expects to purchase a building for city hall and will likely need to issue bonds to finance that acquisition.
Council members asked about specific allocations, including a continuing $1 million housing development reserve that has been budgeted for several years; staff said the reserve is held to respond to housing needs and noted a separate small economic development fund. During closing remarks, staff confirmed some design and remodel work for the council chamber will be carried into next year as planning proceeds.
Next steps: staff indicated the budget includes additional items still under review and that some capital and design projects will be carried over into the next fiscal year. The transcript did not record a formal vote or final action on the budget in this session.
