Florence mayor proposes FY2026–27 budget while pledging reforms after multi‑year revenue diversion

Mayor Julia Abashan delivered the city’s FY2026–27 budget address on June 2, outlining a proposal she said balances investments in public safety, infrastructure and technology with stronger financial controls.

Abashan said the budget reflects a “disciplined and forward‑looking approach,” and noted projected general‑fund revenue growth of about 2.4% despite planned tax reductions. The presentation emphasized continued capital work on streets and water/sewer infrastructure, new investments in AI‑enabled predictive water technologies, and funding for parks and the aquatic center.

The mayor framed much of the budget around repairing governance gaps identified after the city discovered a multi‑year revenue diversion that began in 2023 and is the subject of an ongoing federal investigation. Abashan said outside auditors (Dean Dorton) produced a controls audit with “30 preliminary findings,” citing common themes of limited segregation of duties, reliance on a small number of employees and undocumented processes. She said the city has engaged additional outside auditors and will publish findings once the FBI investigation is complete.

To address those observations, the budget includes structural and staffing changes: separation of the IT budget from administration to improve transparency for an IT program of roughly $2.5–2.6 million; creation of a rentals fund to segregate business‑type event revenues; and establishment of an opioid abatement fund to house settlement dollars. The mayor said the city has already received more than $1 million in opioid settlement funds and will use third‑party administrators to distribute aid to residents pursuing treatment.

The mayor also announced a revised pay plan intended to respond to inflation and to legislative changes (Senate Bill 10) affecting employee health insurance contributions. The plan includes a COLA tied to the February Consumer Price Index and targeted step increases in entry‑level public‑safety pay grades to aid retention of firefighters, EMTs and police officers.

Public safety items in the budget include funding for three additional police officers, new Axon multi‑shot devices for uniformed personnel, and replacement or refitting of CAD systems if a key grant supporting dispatch services moves with the Boone County communications center to Burlington. Fire department priorities include adding a paramedic lieutenant and equipment upgrades for ambulances.

On fiscal strategy, Abashan described a prior reserves investment that placed roughly $70 million of the city’s reserves into higher‑yield instruments to generate additional interest revenue. She said the administration will pursue insurance claims, civil suits and other remedies to pursue restitution for the revenue diversion.

Finance director Jason Lewis confirmed the presentation reflects the budget retreat discussions and noted that the administration has already begun implementing segregation‑of‑duties changes in the finance department, including job‑description updates and adding an internal‑audit function.

Next steps: the budget ordinance will require first and second readings at upcoming June meetings before adoption; Abashan asked council to continue reviewing the proposal with department heads and external auditors in the coming weeks.