Richwood reviews preliminary FY2026–27 budget; contingency fund near $1.9M, replacement fund underfunded

Trisha Ditto presented a detailed, preliminary look at the city’s finances and sought council guidance ahead of a July budget workshop. "All governments use fund accounting," Ditto explained, summarizing differences between the general (operating) fund and enterprise (water and sewer) funds and framing the forthcoming numbers as preliminary until the county provides final appraisals.

Ditto reported that, using the county’s preliminary figures, Richwood’s appraised values were about $642–643 million with net taxable value near $577 million after exemptions. She said roughly $7 million of that figure represented new additions and that assessed value rose about 10.4% from the previous year. Using the current tax rate and those preliminary values, staff estimated roughly $3.2 million in revenue before subtracting the city’s debt requirement, leaving about $2.7 million for the general fund — an increase of approximately $302,000 over last year, pending final figures.

Staff cautioned the council that sales tax receipts are tracking lower than expected and estimated sales-tax revenue could be about $60,000 below this year’s budget; other revenues tied to permits and fines were projected down about $82,000. "Right now as it looks we might have $158,000 additional revenue," Ditto said after accounting for those projections.

On reserves, Ditto showed a contingency fund balance of about $1.9 million (if adjusted as of April 30) and said auditors recommend maintaining reserves equivalent to 120–180 days of expenditures in high‑risk areas. She flagged the replacement fund as underfunded, noting past vehicle and equipment purchases had drawn down balances.

On debt, staff described an outstanding building loan with $110,000 remaining of a $300,000 original principal and said paying it off could modestly reduce the debt component of the tax rate; staff recommended bringing that option back to council for formal action in July.

On utilities, Ditto said the city is looking at a 30¢ per gallon wholesale increase from BWA; staff cited a tentative retail gallon price of $5.26 that includes a 25¢ per gallon debt-service component (the exact retail rate and final debt allocation will be determined before the final budget).

Council asked for timeline clarity; Ditto and other staff said final property values arrive at the end of July/early August and that the budget (and tax rate) will be finalized in September with intermediate workshops in July and August. Staff asked council to indicate budget priorities (for example, shifting more to replacement funds versus contingency, paying down the city‑hall loan, or holding rates steady) so those options can be modeled for the next presentation.

No formal budget action was taken; council scheduled a July workshop to review more complete numbers.