Council hears preliminary 2027 budget: $927K general‑fund increase driven by organics recycling, staffing and software transitions

City staff presented a preliminary view of the 2027 budget and levy choices, saying the largest single package of increases under consideration totals about $927,000 for the general fund.

Major drivers cited

- Organics recycling: staff included an approximate placeholder of $200,000 for an organics‑collection program to meet county requirements after the city crossed the population threshold; this estimate is based on per‑household cost modeling and parallels current recycling costs (recycling costs were discussed at roughly $6–$7 per household per month equivalent; organics was approximated lower per household). Council will decide whether to fund organics through property taxes, utility billing, or require residents to contract for the service privately.

- Planning staff: council and staff proposed adding an associate planner (recruitment cost approximated at about $105,000 total salary/benefits) to address planning workloads and code enforcement that currently stretch one planner and the community development director.

- Public safety costs: police and fire budgets were increased largely for personnel costs, overtime and duty‑crew changes; the police department’s total increase included salary/benefit changes and overtime adjustments, while the fire department requested additional duty‑crew hours and repairs/maintenance funding for new apparatus.

- IT/financial software migration: staff noted the city’s server‑based financial software must move to a cloud/subscription model, producing a multi‑year conversion cost (one‑time implementation spread over three years in staff estimates, roughly $115,000 total phased). Annual subscription costs are also rising and were included as central services increases.

Tax‑rate implications

Staff presented a preliminary estimate that the tax rate under the proposed assumptions would be about 35.277% (an estimate derived from an assumed levy change and forecasted tax capacity). The presenter stressed the number would change as valuations are finalized; the Met Council’s April 1, 2025 population estimate (11,347) and a projected 9.91% tax‑capacity increase were cited as context.

Council questions and direction

Council members asked for: (1) a clearer break‑out of how much of the tax‑capacity increase is from new development versus valuation changes; (2) options to pass organics costs through utility billing versus funding through the levy; and (3) additional detail on event‑related overtime recoveries for police (fee schedules for events). Staff said they will provide follow‑up analyses, including the ordinance/timing impacts and practical staffing implications for utility billing if organics is billed as a utility fee.

Next steps

Staff proposed a follow‑up work session to refine the budget and bring back options on organics funding, the planner position, IT conversion financing, and potential event‑recovery policies for police overtime. Council directed staff to return with those details prior to final levy decisions.