Budget office details fund‑balance rules, sustainability plan and 1.5% efficiency reduction

Aaron Pratt, Metro’s budget officer, and Director Janine Reid delivered the work‑session finance presentation on June 1, outlining the administration’s objectives for the FY27 budget and the evaluation framework used to vet wishlist requests.

Pratt said the office evaluates proposals both through departmental and fiscal lenses, emphasizing recurring versus one‑time funding, community benefit and operational risk. He described revenue growth as limited for the upcoming fiscal year and said the mayor’s recommended budget directs the maximum flexible revenue toward priority areas.

Reid, who said the fund‑balance policy was reapproved in April 2025, told the committee the administration is maintaining the policy targets: 17% operating reserves for general and schools funds, and 50% for debt‑service funds. She said the budget uses fund balance only for one‑time items and that recurring revenues will equal recurring expenses going forward.

Finance staff also described a 1.5% 'budget efficiency' reduction applied to department budgets (excluding pay plan and internal service charges). Pratt said that methodology produced roughly $20.6 million in general‑fund reductions across departments and that departmental Q&A and planning sessions are scheduled so offices can develop implementation plans; any final departmental allocations will be adjusted after the July true‑up and through the substitute and amendment process.

On restricted administrative accounts, Reid urged caution: health and life insurance, injury‑on‑duty projections, charter‑mandated 4% allocations, tax‑increment payments, satellite city payments, legal reserves and a correctional health‑care contract she said is $41.7 million for FY27 are not good targets for one‑time reallocation.

The administration closed the presentation by noting large year‑to‑year modification requests from departments (a spike in FY26 requests and continued high demand in FY27) and by scheduling a public departmental Q&A for June 1 to help departments plan for the efficiency reductions.