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Council weighs hiring freeze, cuts and tax choices as FY27 draft budget projects fund‑balance drop
Summary
Budget officer Amy Schmidt presented FY27 projections showing declining general‑fund reserves under current assumptions; staff proposed a non‑public‑safety hiring freeze, travel and operating cuts, and modeled scenarios that include staying at the current tax rate or moving toward the voter‑approval rate to close gaps.
Amy Schmidt, the city’s budget officer (speaker 11), walked council through FY26 projections and the proposed FY27 draft budget. Schmidt said personnel costs make up roughly 71% of the general‑fund operating budget and that public safety (police and fire) represents about 62% of general‑fund wages and benefits. Under current assumptions — including contractual public‑safety increases, an anticipated fire pension adjustment and transfers to other funds — the FY27 projection shows revenues below expenses and a projected fund balance near 15–17%, below the city’s policy target of 20%.
To close the gap Schmidt summarized a package of cost‑saving measures and choices: a temporary hiring freeze for non‑public‑safety positions (projected savings roughly $4.2M when fully applied to FY27), a 60% reduction in nonessential travel and training, reductions to operating supplies and equipment, an increase in employee health plan contributions, and a review of rates and fees. She also presented two scenarios: one that keeps the tax rate at the current level and incorporates staff‑identified cuts and another that factors in an increase toward the voter‑approval tax rate; the latter scenario would produce a healthier ending fund balance but would require voter authorization if the threshold is crossed.
Council members challenged the assumptions and requested additional detail. Questions included whether overtime increases would offset hiring‑freeze savings (staff said overtime projections had not been reduced in the models and that vacancy effects are handled case‑by‑case), whether the hiring freeze takes into account service impacts, and how much additional revenue various incremental tax‑rate choices would raise once final property valuations are available in August. Schmidt said she would return with scenarios that explicitly model (a) the current tax rate plus the staff savings package, (b) incremental tax‑rate increases short of voter‑approval, and (c) the voter‑approval rate calculations once county appraisals are finalized.
Schmidt also highlighted ongoing capital and supplemental requests totaling about $21M across departments (ERP, Cityworks software, park cameras and multiple facility needs). Staff proposed shifting some facility maintenance to CIP and considering tax notes or lease options for fleet purchases instead of one‑time outlays.
Next procedural steps: staff will refine the scenarios with updated collection and valuation data, model class‑specific utility rate options (as requested), and present a revised package at the August budget hearing before final adoption in September.
