Franklin finance committee orders 7% departmental cuts, sets Oct. 10 return date to balance 2026 budget

The Franklin City Finance Committee on Oct. 1 directed city departments to identify a 7% reduction in operating budgets and return prioritized plans by Oct. 10 as the committee works to close an estimated $870,000 shortfall in the proposed 2026 operating budget.

The action — approved after a motion and second at the meeting — asks departments to submit prioritized lists showing which items they would restore if some funds are returned; the committee voted to forward the recommendation and associated direction to the full council. Committee members discussed a mix of short-term and structural options including temporary hiring freezes, targeted borrowing, changes to the debt-service levy, and program re-evaluations for tourism and senior services.

Why it matters: Committee members said personnel expenses account for roughly 80% of city spending and that the city cannot rely on projected new construction revenues to close the gap in 2026. The committee sought a short-term path to a balanced budget while asking staff to pursue efficiency and revenue changes that would reduce recurring operating pressure.

At the meeting, resident Paul Rodson urged a series of immediate cost cuts — including laying off police and firefighters and trimming inspection staffing — saying those steps would reduce expenses by several hundred thousand dollars. Rodson also recommended stricter health-plan spousal coverage rules and larger use of debt to cover capital work. “I know you have tough decisions to make,” Rodson said during public comment; his estimates and layoff suggestions were discussed but not adopted as specific committee direction.

Committee members weighed the trade-offs between cutting personnel and borrowing. Some members recommended limiting layoffs and instead freezing open positions or delaying hires; others said a temporary across-the-board reduction would be faster to implement. Several committee members favored asking each department to take and prioritize a fixed percentage cut (the committee landed on 7%) and to report back quickly.

The committee reviewed possible revenue adjustments and one-time maneuvers discussed during the meeting:
- Debt service levy: staff said the city could levy up to $1.3 million in debt service in 2026; using the full levy would increase the average property tax by more than 6% but would produce roughly $410,000 usable for the general fund. Committee members discussed partial levies as a way to raise operating dollars without large immediate cuts.
- Landfill tipping fees and capital funding: councilmembers noted substantial landfill-siting revenue and discussed using those and capital shifts to preserve street projects while moving operating dollars to balance the budget temporarily.
- Ambulance/Medicaid revenue and state aid: staff noted an anticipated $130,000 in ambulance Medicaid revenue for 2026 and a modest transportation aid addition of about $36,000 to the general fund.

Operations and staffing options were debated in detail. Police and fire overtime were a central concern: the police department’s overtime ran about $440,000 in 2023, $300,000 in 2024 and was projected around $312,000 for 2025; members discussed capping overtime at last year’s budgeted amount (with contractual wage increases applied) and requiring quarterly reporting on overtime use. Members also discussed filling fewer open positions in 2026 (for example, delaying 1–1.5 positions across departments) and directing department heads to propose how they would achieve the required cuts without immediately resorting to layoffs.

Tourism fund and civic events: the committee considered an email proposal from a councilmember asking that 15% of the remaining room-tax funds be redirected from the Tourism Commission fund to the Civic Celebration fund (about $62,700 on a $418,000 base). Staff explained state law requires at least 70% of room-tax revenue be directed to tourism, marketing and development; up to 30% may be redirected for other uses consistent with statute. Members asked the Tourism Commission and staff for data tying major events to hotel stays and suggested longer-term review of tourism contracts, vendor consolidation and more centralized solicitation of donations.

Senior services: committee members debated a request to keep the senior travel program close to last year’s spending level after the program increased from roughly four trips a year (pre-2023) to eight or nine events following a carryover and one-time funding. The committee agreed to hold the program at the $22,000 level spent in the recent year for the 2026 budget but asked staff to centralize and tighten future fundraising and sponsorship processes.

Direction to staff and next steps: The committee set Oct. 10 as the return date for departmental reduction plans and prioritized lists, and asked staff to prepare recommended levy options and to identify capital shifts and other one-time resources that could help balance 2026. The motion directing departments to cut 7% passed on voice vote; committee leaders said they will continue to refine options before the council’s budget hearing and the Nov. 11 final adoption date.

The meeting included public comment, detailed departmental discussion and multiple follow-up requests for staff analysis; several councilmembers emphasized the need to pair short-term controls with longer-term efficiency and revenue measures so the city will not face the same shortfall when one-time resources or anticipated development revenues do not materialize.

Outcome: The committee approved the 7% reduction directive and asked departments to return prioritized reduction plans by Oct. 10 for committee review and referral to council.