Council reviews 2027 draft budget showing $1.83M projected use of cash; contingency and PSAP consolidation debated
September 02, 2026 | Spearfish, Lawrence County, South Dakota
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Michelle (city finance staff) walked council through key adjustments for the 2027 budget and clarified projected cash flows across funds.
She said the finance packet shifts $50,000 for a financial-software upgrade into 2027, reduces the Streets budget by $400,000 tied to timing of the Main Street mill-and-overlay project, and removes a $250,000 transfer to the 911 fund because the city is consolidating its Public Safety Answering Point (PSAP) with Lawrence County; Michelle said the consolidation is expected to finish by Dec. 27, at which point the city will no longer receive 911 calls. Michelle reported a projected use of cash of $1,825,425 across funds and showed recurring revenue of about $44,700,000 versus recurring expenses of about $37,500,000; she also said the city still maintains reserve levels (roughly $7,000,000 in reserve for the general fund).
Council discussed contingency amounts. Michelle explained the purpose of a contingency line: it provides budget authority that can be moved by council action without the full publication process for a budget supplement. She said historical contingency usage averages below $150,000 per year and recommended retaining contingency authority (the draft included $750,000 total across weather and general contingencies; some council members favored reducing the non-weather contingency to zero and retaining the weather contingency). Council ultimately indicated a preference to keep contingency funds available but discussed reducing overall amounts.
Other budget items noted: the airport waterline project was re-scoped — originally budgeted at $1.1 million, staff said bids let the project be reduced to $700,000 and split between 2026 and 2027 (about $350,000 each), and the draft includes an estimated 2027 contractual obligation of $250,000 for PSAP consolidation costs.
Michelle also outlined enterprise-fund positions: the sewer fund shows a projected use of cash and may require future rate increases; staff recommended continued review of enterprise fund rates and operational efficiencies. No final appropriations vote occurred during the study session; Michelle said the first reading of the appropriations ordinance will be on the next council agenda.
She said the finance packet shifts $50,000 for a financial-software upgrade into 2027, reduces the Streets budget by $400,000 tied to timing of the Main Street mill-and-overlay project, and removes a $250,000 transfer to the 911 fund because the city is consolidating its Public Safety Answering Point (PSAP) with Lawrence County; Michelle said the consolidation is expected to finish by Dec. 27, at which point the city will no longer receive 911 calls. Michelle reported a projected use of cash of $1,825,425 across funds and showed recurring revenue of about $44,700,000 versus recurring expenses of about $37,500,000; she also said the city still maintains reserve levels (roughly $7,000,000 in reserve for the general fund).
Council discussed contingency amounts. Michelle explained the purpose of a contingency line: it provides budget authority that can be moved by council action without the full publication process for a budget supplement. She said historical contingency usage averages below $150,000 per year and recommended retaining contingency authority (the draft included $750,000 total across weather and general contingencies; some council members favored reducing the non-weather contingency to zero and retaining the weather contingency). Council ultimately indicated a preference to keep contingency funds available but discussed reducing overall amounts.
Other budget items noted: the airport waterline project was re-scoped — originally budgeted at $1.1 million, staff said bids let the project be reduced to $700,000 and split between 2026 and 2027 (about $350,000 each), and the draft includes an estimated 2027 contractual obligation of $250,000 for PSAP consolidation costs.
Michelle also outlined enterprise-fund positions: the sewer fund shows a projected use of cash and may require future rate increases; staff recommended continued review of enterprise fund rates and operational efficiencies. No final appropriations vote occurred during the study session; Michelle said the first reading of the appropriations ordinance will be on the next council agenda.
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