Commission sets preliminary millage at 7.581 mills; staff to close $371,000 shortfall

Finance Director Lori Carr presented the preliminary numbers for the fiscal‑year budget process and recommended the commission approve a proposed millage rate of 7.581 mills for the trim notices. Carr stressed the decision tonight sets a proposed (preliminary) rate for property tax notices; the final adopted millage can be lower but an increase would require additional mailing to property owners.

Carr said the city’s taxable values increased about 9.3% but that new construction revenue fell from the prior year. She outlined major cost drivers, including a confirmed 5.5% increase in health insurance and an estimated 14% rise in property and casualty premiums, which are still being finalized. The preliminary general‑fund revenues were approximately $28.2 million against expenses of $29.8 million, producing a $1.6 million shortfall. Carr noted typical practice sometimes funds recurring capital or CIP from reserves; using reserves to fund some selected recurring capital reduced the immediate shortfall to about $371,000.

City Manager and finance staff said they will continue to refine the budget, but warned the commission that balancing the budget could require cutting about $680,000 in operating requests or using fund balance. Carr said the city holds healthy reserves and that past years have closed with surpluses when vacancy savings and unspent projects materialized, but she cautioned relying on unspent budget as a strategy.

The commission approved Resolution 25‑54 (proposed millage of 7.581 mills) on a recorded vote. Commissioners asked staff for follow‑up work on the capital improvement program and to schedule additional budget workshops to address the remaining shortfall and finalize the budget before final adoption in September.