City unveils FY 2026–27 budget with $17 million gap under conservative assumptions

City Finance Director Abby Viser presented the proposed FY 2026–27 budget on June 1, telling council the plan uses a conservative practical scenario that assumes no Vehicle License Fee (VLF) backfill for 2026–27 and retains vacancy‑funding conservatively in departmental budgets.

Viser said the proposed citywide budget totals $356.5 million with the general fund at $183.8 million and capital projects proposed at $66.3 million for 2026–27. She underlined three mechanics affecting the gap: modest revenue growth (property tax +3.2%, sales tax ~+1%), rising personnel and operating costs (personnel up ~3.6% in the general fund, insurance and utilities increases) and uncertainty on the VLF backfill. "That leads to our $17 million budgeted deficit," Viser said, summarizing the practical scenario used in materials.

Viser noted the proposed budget assumes 10 currently frozen positions remain authorized but does not bake their savings into base personnel estimates; she said those steps could reduce the gap if maintained through the fiscal year. She also highlighted that the city’s sewer and storm enterprise funds are set out separately and that sewer debt service will rise as state loan reimbursements and paybacks come online.

Councilmembers asked about potential revenue options and program cuts, the timing and scale of VLF litigation and advocacy, and near‑term one‑time requests. Staff answered specific requests, and council directed staff to continue outreach and to return with final adoption materials on June 15.

What’s next: the council will hold a second public hearing and proposed budget adoption on June 15; staff said the city will continue pursuing VLF remedies and study additional revenue and cost‑recovery options.