Finance staff outlines FY27 pressures and tax-rate scenarios; council asked for direction before Aug. 18 draft

Amy Schmidt, presenting the draft FY27 framework, summarized cost drivers — contract wage steps and proposed cost-of-living adjustments, a projected 9% rise in health benefits, technology and capital purchases (ERP and CityWorks), and transfers for employee benefits and capital reserves. She itemized supplementals that staff included so far: an ERP system ($726,000), CityWorks software ($767,000), offender-registration software (~$34,000) and other smaller items for parks and animal services.

Schmidt walked the council through tax-rate scenarios and the revenue/fund-balance implications: the current adopted rate is 0.659663; a “no new revenue” scenario would be 0.683976; keeping the current total but absorbing additional debt yields 0.692802; past-adopted rates and the voter‑approval ceiling were shown for comparison. She also translated impacts to household bills (example estimates staff provided for a $150,000 home) and told council that at the current adopted rate, FY27 projections show an ending fund balance of about 17% (below the city’s 20% target). “August 18 will be the actual official date that we will that the city manager will present the proposed FY '27 budget,” Schmidt said, and staff asked council to give clear guidance on a tax-rate target so they can present a draft consistent with council direction.

Council members asked detailed questions about fund-balance mechanics (including the effect of GO-bond debt, abatements and industrial payments), the collection rate assumption (97%) and how many dollars must be cut to change fund-balance percentages (staff said roughly $1.8 million of expenditure change moves the fund balance by ~1%). Staff offered to provide a line‑by‑line follow up on industrial payments and abatements and a ten-year view of transit and other fund transfers.