Staff will present and seek input from City Council on the FY2027 City Manager's Recommended Budget and FY2027-2031 Capital Improvement Program (CIP), with a total budget of $855.2 million. Council discussion and feedback will be used to develop the FY2027 Tentative Budget that will be presented to Council on May 18, 2026 prior to final budget adoption in June 2026. (Ryan Bittle, Finance Manager)

This is an informational step in building the city's FY2027 budget. As proposed, this budget complies with the Council-adopted financial policies that provide for fiscal conservatism, flexibility, and adherence to legal requirements and professional practices. Property tax rates are within legal limits and the combined rate is below the maximum established in the adopted financial policies. This is a balanced budget with no proposed tax increases, that maintains existing service levels for all programs across the city, that expands service levels in the critical areas of public safety and water/wastewater, and demonstrates a continued commitment to invest in our city's employee base while addressing and furthering various city initiatives centered around ensuring delivery of the city's adopted FY2026-2029 Strategic Plan.

The development of the city's FY2027 budget began in the summer of 2025, shortly after adoption of the city's FY2026 budget, and represents months of coordinated work across the organization. Departments first review prior funding decisions, revised operational needs, and emerging priorities based on service demands and direction from City leadership as part of compiling their new budget requests. Proposed requests are then evaluated through multiple levels of review, taking into account available resources, opportunities for efficiencies, impacts on residents, maintenance of current levels of service, all while considering alignment with the City’s adopted FY2026-2029 Strategic Plan. Only those budget requests that align most closely with these criteria advance for further consideration and form the foundation of recommended budget that will be discussed in this work session. 

Base budget funding required to maintain current City services was addressed early in the process, allowing for additional focus on supplemental and capital improvement project requests. All recommendations have been subsequently reviewed by the Budget and Research team, Executive leadership, and key internal partners including Information Technology, Human Resources, and Public Works - Facilities when applicable. City Council provided early input during its February 2026 retreat, including discussion on current economic conditions, a five-year General Fund forecast, and associated risks. Council guidance directly informed the development of this recommended budget. Any updates or changes since that February 2026 retreat discussion will be clearly presented and reconciled. Additional detail and supporting information can be found in Attachment A, the City Manager’s Recommended Budget Book, which is intended to support Council discussion and decision-making as well as be a resource to the public promoting transparency and fiscal accountability.

General Fund resources exceed proposed uses by $4.8 million, which have been programmed both as CIP Reserves needed to support our fully funded five-year CIP and set-aside for future operating costs related to CIP projects. Any changes that arise impacting this number will be reflected when the Tentative budget is presented for adoption on May 18, 2026. This recommended budget is built around and complies with the city's core financial policies previously adopted by Council. The budget maintains current programs and services for an expanding population base and addresses the highest priorities expressed by the City Council, including public safety, sustainability, prudent financial stewardship, compensating employees fairly, providing capacity to absorb capital cost increases and actively pursuing economic development opportunities.  In addition, the recommended budget maintains a focus on investing in infrastructure through our capital improvement program.

As presented, the recommended budget retains all base budget programs and adds $9.4 million in ongoing supplemental requests, 57.5 new full-time equivalent (FTE) positions, and $16.4 million in one-time supplemental requests. The overall FY2027 budget reflects a decrease of 31% over the FY2026 revised budget driven primarily by multi-year capital improvement project dollars programmed in FY2026 that will be carried over through Council action prior to the final adoption of the FY2026 budget. Those FY2026 carryovers will be added, reconciled, and presented to Council as part of the FY2027 Tentative budget presentation in May.