Shelbyville reviews FY2027 draft budget, weighing $1.4 million pay-study cost, paving and capital priorities

The City of Shelbyville’s mayor and council met June 4 in council chambers for a fiscal year 2027 budget workshop to review the draft budget, hear departmental requests and give staff guidance on priorities.

City staff opened the meeting with an overview of the budget notebook and emphasized that the packet as distributed does not include any pay increases. The city treasurer said the pay‑study estimate—about $1.4 million—has been added to the expenditure side in staff calculations but not yet populated line‑by‑line by department; including that amount would reduce the projected general‑fund balance from 27.3% to roughly 22.1% but would still exceed the city’s 20% fund‑balance target. “Those [fund‑balance] figures don’t reflect the pay study,” staff said, noting that department‑level breakdowns were still forthcoming.

On property taxes, staff told councilors the budget uses a preliminary certified tax rate of 1.03. That figure could change after county and state equalization reviews, but the packet assumes revenue similar to the previous year at the certified rate.

The draft budget also includes a proposed transfer of $1.225 million from the general fund to state street‑aid to support about $1.55 million in paving next year, an increase from roughly $1.15 million transferred this year. Staff said the transfer reflects council interest in accelerating pavement projects. For the first time staff also included $100,000 in the state‑street aid fund for traffic‑signal upgrades, to be coordinated with the power system.

Staff highlighted roughly $13.3 million in capital requests flagged in the notebook. Major items include a multi‑field soccer complex, airport projects largely funded with federal grants, and IT resilience upgrades; the packet notes some capital items are grant‑funded or have county cost‑share commitments. The soccer complex work was described as a regional facility expected to attract tournaments and tourism dollars.

Councilors pressed staff for more detail on how certain funds are classified. Several reminded colleagues that the apparent decline in fund balance over the past several years reflects assigned or designated funds—ARP, capital project carryovers and grant matches—that had already been committed to projects such as flood‑pump work. Staff said some previously committed capital dollars will require budget amendments next fiscal year because projects approved in prior years may not finish by June 30.

Personnel and department requests drew extended discussion. Staff described pay‑study mechanics—how raises, longevity payouts and employer wage‑related costs (benefits, payroll taxes) affect totals—and warned that payroll budgeting requires allowances for payout of accrued leave and other one‑time items. The fire department explained why pay‑study comparisons can skew when local staffing models rely heavily on part‑time pools and minimum staffing requirements.

Staff also proposed several new or reclassified positions tied to operations and capital priorities, including converting a part‑time assistant athletic coordinator to full time to support the soccer complex, and a public‑information/communications manager. Councilors generally favored piloting lower‑cost alternatives for the communications role (temporary hires, shared services with county or chamber) before committing to a full‑time, higher‑salary position; they broadly supported converting the athletics position if offset by eliminating underused part‑time posts.

The council directed staff to bring back specific department breakdowns—particularly for the pay‑study allocation by department—and to schedule public presentations from retail‑strategy consultants. Staff was also asked to prepare an RFQ by July to explore a relocation plan and funding options for the senior center, and to return to council with refined budget numbers at the next meeting.

The workshop produced guidance rather than final votes. Staff will incorporate council direction into a revised budget to be presented for formal consideration in coming meetings.