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City warns of widening budget gap as expenses outpace revenue; firefighters' overtime flagged
Summary
The finance commissioner told the council that midyear figures show revenues lagging and expenses rising, projecting a possible multi‑million-dollar deficit driven largely by firefighter overtime and benefits; council members said they will explore revenue options and operational efficiencies.
The finance commissioner presented a midyear update showing revenues at about 42% and expenses at 51% for the first half of the year and warned that the city faces a structural budget imbalance that could produce a multi‑million‑dollar shortfall if trends continue.
"We're projecting closer to a $5,000,000 loss," the finance commissioner said in describing the worst-case scenario for 2027 projections; the presentation also showed a projected end‑of‑year revenue figure around $63 million versus projected expenses near $68 million. The commissioner said using $3 million of the city's unassigned fund balance would leave the reserve at approximately $8.4 million.
Council members repeatedly pointed to firefighter staffing and contractual minimums as the largest drivers of overtime and benefits costs. One commissioner noted that 16 firefighters hired when Fire Station 3 opened were funded by the SAFER grant; when the grant ended, the city absorbed the ongoing cost. "The elephant in the room is the firefighters and the expansion of Fire Station 3 has not been funded or planned to be funded, and that is what's causing the problem," a councilmember said during the discussion.
Members agreed to continued analysis of both expense-side efficiencies and limited revenue options — noting the state property tax cap constrains city tax increases — and the finance team said it will present a property-tax-cap calculation and budget scenarios during the coming budget process.
Next steps: staff will produce multi-year projections and scenarios for the 2027 budget; the council encouraged conservative baseline budgeting and required documentation for new baseline requests.
