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Salem City Council adopts FY26/27 budget with growth-funded priorities and no property tax rate increase
Summary
The Salem City Council approved the FY26/27 budget, preserving the current property tax rate, funding public safety hires and capital projects, and relying on impact fees and enterprise transfers to cover growth-driven infrastructure costs.
The Salem City Council voted to approve the FY26/27 budget on June 3, 2026, adopting a plan that Council and staff said avoids a property tax rate increase while supporting planned capital projects, staffing additions, and ongoing bond payments.
Finance Director Jeffrey Nielson presented the proposed budget, highlighting revenue assumptions including an estimated 12% growth in property tax base and roughly 4% growth in sales tax, and noting higher costs for insurance and employee compensation. Nielson said the budget is organized by department to increase transparency and accountability.
Council approved new positions and equipment purchases funded through a mix of enterprise revenues, impact fees and bonds. Notable items called out in the budget presentation included commitments related to public safety (new police hires and fire apparatus bond payments), park improvements and cemetery expansion (a $200,000 allocation from capital improvements), and new equipment for public works and utilities such as a 10-wheel dump truck and radio-read water meters.
City staff said utility rate changes were kept modest: a 2% increase for water usage and base charges, no sewer rate increase, and a proposed electrical rate adjustment reflecting a 15% wholesale cost increase from UMPA. The budget also anticipates substantial residential growth in the coming year, with staff projecting hundreds of new homes and using developer fees to fund growth-related infrastructure.
The budget motion (moved by Councilperson Delys Snyder and seconded by Councilperson Craig Sacco) passed as recorded in the minutes (motion carried with recorded 'Aye' votes). The Council’s action follows a public hearing on the budget and related fee transfers earlier in the meeting.
Council members asked staff about contingency planning and reserves; Finance staff noted the City maintains a healthy reserve fund to address unforeseen emergencies. Staff also said a recent wage study informed proposed salary adjustments, which would be finalized in conjunction with performance reviews.
The Council directed staff to continue refining implementation details for several capital projects and to return with any required agreements and timelines; no further public hearings were scheduled in the meeting minutes for the budget adoption.
