AGENDA CAPTION:
Title
Receive a Staff presentation and hold a public hearing to receive comments for or against Ordinance 2026-37, adopting an operating budget in the amount of $406,000,496.00 for the fiscal year beginning October 1, 2026 and ending September 30, 2027; authorizing certain adjustments to the budget with the approval of the City Manager; or her designee, approving fiscal year 2026-2027 Capital Improvements Program Projects in the amount of $60,925,000.00; including procedural provisions; and declaring an effective date; and consider approval of Ordinance 2026-37 on the first of two readings.
Body
Meeting date: September 1, 2026
Department: Finance
Amount & Source of Funding
Funds Required: N/A
Account or Project Number (C = CIP funds): N/A
Funds Available: N/A Click or tap here to enter text.
Account Name: N/A
Fiscal Note:
Prior Council Action: City Council Strategic Planning and Visioning on January 29-30, 2026, Budget Policy Workshop on February 26, 2026, Budget Policy Adoption on March 31, 2026 (Resolution 2026-46R), Budget Workshops on May 19, 2026 and June 25, 2026.
City Council Strategic Initiative: [Please select from the dropdown menu below]
Public Safety, Core Services & Fiscal Excellence
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Comprehensive Plan Element (s): [Please select the Plan element(s) and Goal # from dropdown menu below]
N/A Arts and Culture - Choose an item.
Yes Economic Development - Choose an item.
N/A Environment & Resource Protection - Choose an item.
N/A Housing + Neighborhoods - Choose an item.
N/A Land Use + Community Design and Character - Choose an item.
N/A Parks & Public Spaces + Health, Safety & Wellness - Choose an item.
N/A Transportation - Choose an item.
Yes Core Services
N/A Not Applicable
Master Plan: [Please select the corresponding Master Plan from the dropdown menu below (if applicable)]
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Background Information:
The Fiscal Year 2027 operating budget totals $406,000,496.00 which is a $32.2 million or 8.6% increase from the adopted budget for Fiscal Year 2026. The budget is balanced and meets the criteria set forth in the City’s Budget Policy Statement. The Capital Improvement Program for Fiscal Year 2027 totals $60,925,000.00.
City Council held a Visioning workshop in January where they refined their strategic goals and prioritized programs and services. A Budget Policy workshop was held in February to formulate the Budget Policy that was adopted in March. The strategic goals and Budget Policy established by City Council were used to create the proposed Fiscal Year 2027 budget, which was presented to City Council during budget workshops in May and June.
Revenue Summary
This budget, as submitted, proposed to keep the same tax rate as Fiscal Year 2026 at 65.1500¢. City Council adopted the maximum proposed tax rate of 65.1500 cents per $100 valuation.
The tax rate is comprised of two components, 1) operations and 2) debt. The operations component of the tax rate is 51.2600 cents and the debt component is 13.8900 cents. In 2022, City Council approved a local homestead property tax exemption of $15 thousand and increased the local senior and disabled property tax exemption by $10 thousand to $35 thousand. In Fiscal Year 2027, these local property exemption amounts remained the same and provided residents with $1.6 million in property tax relief.
The proposed budget also includes recommendations from the Citizen Utility Advisory Board (CUAB) for Water and Wastewater rates and Electric base rates. CUAB recommended a minimum 1.3% effective rate adjustment for electric services and a 3.4% effective rate for water-wastewater, with a 5.0% rate adjustment for water and 2.0% for wastewater services.
During the August budget workshop, Council asked staff to model different rate scenarios for Stormwater based on varying capital project sizes. Staff evaluated projects costing $10M, $17M, and $24M. To fund projects of those sizes, annual rate adjustments of 1.9%, 3.8%, and 5.8% would be needed for the next three years. These increases would result in Fiscal Year 2027 R2 - medium residential rates of $15.18, $15.47, and $15.76 per month respectively. Given that inflation is over 4% as of June 2026, and the growing pressures on the General Fund, a modest, incremental rate adjustment would help strengthen the fund and support future project needs.
Resource Recovery rates will increase 1.0% for services. These Resource Recovery rate adjustments are proposed for residential and multifamily services.
The proposed rate and fee adjustments will be considered separately by City Council and a separate public hearing will be held for each.
Expense Summary
Public Safety, Core Services, and Fiscal Excellence is one of City Council’s strategic goals. Supporting this goal, the proposed budget includes 988.13 full-time equivalents (FTEs). This is an increase of 52.2 FTEs from the authorized 2026 total. This increase includes bringing on a total of 54 Emergency Medical Services employees as well as bringing in-house temporary positions throughout the city instead of hiring the position through an outside agency. The temporary positions were funded by offsetting operational expenses.
The budget also includes a 3% increase for a cost-of-living adjustment for non-civil service employees. The Police and Fire compensation adjustments, as approved in the Meet and Confer Agreements, are included in the proposed Fiscal Year 2027 budget.
Council Committee, Board/Commission Action:
The Citizen Utility Advisory Board met and voted to recommend a minimum 1.3% effective rate adjustment for electric services and a 3.4% effective rate adjustment for water-wastewater, with a 5.0% rate adjustment for water and 2.0% for wastewater services.
Alternatives:
City Council may adopt the budget as presented or make changes as deemed necessary.
Recommendation:
City Council approve the ordinance adopting the Fiscal Year 2027 Annual Budget and Capital Improvement Program.