Finance director outlines $83.6 million recommended city budget, proposes pay increases and new auditor

Rachel Nichols, the city finance director, presented the proposed 2026–27 budget to the council May 12, saying the plan balances operating revenue and expenses while funding targeted new positions and community grants.

Nichols said the budget proposal includes a total of $83,613,966 in funded positions within the overall request and a total city operating picture that, including utilities, shows operating expense of about $116.2 million and revenue of roughly $135.7 million. She recommended a $0.50-per-hour cost-of-living adjustment for all employees and step/percent adjustments for staff in larger and smaller departments, noting the approach helps lower-paid employees buy essentials.

Nichols also recommended adding an internal auditor position and select public-works and utility positions; the salary-plus-benefits impact of all new positions requested was roughly $2.7 million, while Nichols recommended funding about $1.76 million of those requests in the proposed budget. The presentation highlighted a fund balance of $65.9 million (audit year-end), a rainy-day fund target of $15.53 million, and a dedicated infrastructure reserve of about $29.96 million.

Nichols reviewed community enhancement grant recommendations totaling $306,000, listing recipients and recommended allocations (Historic Downtown Gallatin, Gallatin Public Library, Chamber of Commerce, Habitat for Humanity of Sumner County and other local nonprofits). She also noted plans to delay an additional fire apparatus purchase pending further fiscal certainty.

Council discussion included requests for slide materials and follow-up detail on departmental funding and capital lines. The committee moved the budget on to full council for consideration.