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City rolls out preliminary FY27 budget projections that hold taxes steady, flag major cost pressures
Summary
Perry staff released preliminary FY27 projections totaling about $65 million in revenue, with no tax increases assumed; the presentation flags major cost pressures including county water rate hikes (up to 25% announced), a planned sewer connection fee increase, electricity and ESG contract cost increases and potential solid-waste diesel surcharges.
At a work session, the Office of the City Manager presented preliminary projections for the City of Perry's FY27 budget and emphasized the intent to provide earlier transparency rather than a finalized administration proposal. "What the preliminary budget projection is not is administration's proposed FY27 budget," the presenter said, adding that some departmental requests and capital items were excluded pending further review.
Key revenue assumptions: staff rolled forward FY26 collections (no new taxes assumed), projected fee growth of roughly $400,000 across funds and estimated total FY27 projected revenue across all funds at approximately $65 million.
Major cost pressures highlighted:
- County water purchase increases: staff reported the county will raise water rates (a 25% increase was cited effective July 1) and tie future increases to CPI, making wholesale water a significant upward pressure on the city’s water/sewer costs.
- Sewer connection fee: one approved fee increase (connection fee from $2,500 to $5,450 effective Jan. 1, 2027) was built into projections.
- Electricity and enterprise operations: electricity costs were projected to rise by roughly $181,000; AE Harris wastewater facility operations were budgeted for a full 12 months, adding approximately $385,200 versus a partial year in FY26.
- Contracted operations: ESG Inframark proposed a 2.6% contract increase (about $294,800) to operate utility systems; staff noted the vendor provides economies of scale and a 100% compliance guarantee.
- Solid waste and fuel surcharge risk: the Ryland contract scales with customer counts and allows fuel surcharges when diesel exceeds thresholds; staff reported diesel at $4.91/gal in March and expected a 4% surcharge (roughly $4,000–$4,200/month) that was not yet budgeted.
Staff also outlined internal assumptions: a 2% employee pay increase was included across funds; no operating transfers were assumed to balance non‑general funds; departmental requests, vehicle replacements, and most capital items were excluded pending further review.
The presentation included fund‑level detail (general fund reimbursements for the Convention and Visitors Bureau’s salaries, PPFA debt‑service mechanics paid via general fund then reimbursed by enterprise funds, and hotel/motel revenue distribution rules under state law).
Timeline and next steps: staff will refine numbers with department heads over the next month. The city manager's proposed budget is scheduled for May 5; department presentations on May 18–19; a public hearing and first reading on June 2; and second reading/adoption on June 16. State law requires an adopted budget by July 1.
Councilmembers asked for backup detail on debt schedules, contract terms (especially ESG and Ryland), and operating‑versus‑debt splits for enterprise funds; staff agreed to provide additional spreadsheets and contract summaries for upcoming workshops.
