Fitchburg's financial plan shows policy compliance but flags a $575,000 levy-limit gap for 2027

Fitchburg's annual financial management plan, presented June 24 to the Committee of the Whole, concluded the city is currently in compliance with its written financial-policy metrics but faces growing levy-pressure that could produce a projected $575,000 budget gap in 2027.

Greg, a consultant with vendor Ellers, told the panel the plan is a multi-year forecast used to guide the city's capital improvement plan and annual budget. "The city's unassigned general fund balance was 15.16% of general fund revenues," Greg said, noting that falls inside the city's 15% to 25% policy range and contributes to Fitchburg's credit-strength profile. He added that Fitchburg has structured policy limits for debt and borrowing to preserve capacity.

The presentation listed specific liquidity figures for the utility funds. "The water utility had cash on hand equivalent to 1507 days, sewer utility 386 days, and the storm water utility 270 days," Greg said, citing metrics the city uses in part to align with Moody's credit guidance.

On the debt and capital side, the consultant said roughly $98.8 million of projects in the current 10-year CIP are identified to be funded with debt. He reported the city's net tax levy for debt service in 2026 was $5,451,578 and that Fitchburg's debt-service tax rate was about $0.87 per $1,000 of equalized value. The plan's model spreads CIP borrowing impacts to smooth levy changes, arriving at an approximate $850,000 annual levy-change target to avoid spikes.

Despite meeting policy tests, the forecast shows structural pressure under Wisconsin's levy-limit framework. Greg summarized the levy-limit mechanics and said the model projects "a gap of about $575,000" for 2027 under conservative assumptions. That projection assumes 2.5% net new construction in the near term and counts only the debt adjustment available under levy rules; other allowable adjustments (for joint fire/EMS, for example) could alter the final number.

Council members pressed on the size and implications of the gap. Committee member Bill asked whether the projection represented a real shortfall; Greg described the forecast as a conservative, high-level starting point for budget deliberations and said the council will have options to close the gap during the budget process, including prioritizing projects, applying fund balance for one-time capital, or pursuing targeted levy adjustments or referenda.

Why it matters: Fitchburg's primary operating revenues are heavily property-tax based and constrained by state levy limits. The consultant highlighted the decline in revenue from the state Expenditure Restraint Incentive Program (E-RIP), citing a recent payment of about $650,000 in an earlier year and an expected ~$250,000 in the coming year, noting that communities can lose eligibility if mill rates fall below program thresholds.

Next steps: The forecast will feed into department-level budget work and CIP prioritization during the city's 2027 budget process. The Committee of the Whole will continue budget discussions at upcoming meetings and the administration will provide more detailed line-item proposals for council consideration.

Action recorded: The meeting approved the May 27, 2026 committee minutes by voice vote before the presentation.