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Richwood staff previews FY2027 budget: 4% pay proposal, contingency cap guidance and utility-rate options
Summary
Finance staff presented a preliminary FY2027 budget that includes a proposed 4% cost-of-living adjustment for staff, a recommendation to build contingency savings (council gave guidance toward a $2,000,000 cap with overflow to parks), and a utility-rate package staff modeled that included a 10.5% option but with staff asked to return a 5% scenario for council consideration.
Finance director (the speaker who led the presentation) opened a July budget workshop, calling the figures preliminary until the county certifies taxable values on Aug. 1.
"We are, proposing a 4%," the finance director said when presenting personnel cost proposals, explaining the increase is intended to retain staff amid higher inflation and to align with Social Security cost-of-living guidance.
Staff described the timeline for the budget process: certified county valuations due Aug. 1, a record vote to set a maximum tax rate at the Aug. 10 meeting, and a final vote on rates and the budget in September following public hearings. The finance director repeatedly emphasized the numbers are preliminary and will be updated when firm county and insurance premium figures arrive.
On reserves, staff outlined the city’s contingency history and recommended council guidance on a policy cap. The finance director said the contingency fund began to grow after prior storm-related withdrawals and suggested a policy approach that would cap contingency and divert surplus into a capital/park fund to enable matching grants.
Council members discussed a $2,000,000 cap (roughly a six‑month operating buffer in the staff presentation) and raised tradeoffs between building reserves and funding near-term park projects. One council member framed the choice as "if the cup starts overflowing, what would we want to put that in?" Several council members asked staff to return a formal financial-policy draft next month.
On utilities, staff said the enterprise fund faces a shortfall under current rates and presented options that would fund operating costs, debt service and modest reserves. Staff modeled a 10.5% rate increase that would restore nearly full reserve targets but told council they could return a 5% option. The finance director explained the proposed 10.5% would change an example base residential bill by about $7.57 per month under the modeled scenario.
Council and members of the public debated how to distribute increases between base charges and tiered consumption rates so that low‑usage households are not disproportionately affected. Staff agreed to run usage data and return targeted options showing the fiscal and customer-impact tradeoffs.
Staff also identified cost-uncertainty items that remain to be finalized (insurance premiums, county-certified values and potential BWA wholesale water increases). The discussion closed with staff noting it will bring firm numbers and fee-schedule amendments back next month for council action.
