City manager outlines FY2027 budget pressures as property values fall

City management presented the recommended FY2027 budget and described the fiscal choices behind it: lower property valuations, selective cuts and the need to preserve services.

Staff said property valuations dropped 2.8% this year and noted the city’s tax roll and proposed tax‑rate calculations; the presentation explained an estimated FY2027 general fund balance of about 34% and a planned reduction in departmental budgets by 1.9%. As staff put it, “This was the 1st time in a long time that our property values decreased and it decreased by 2.8%.”

The presentation called for a targeted 2% salary adjustment and some market corrections, a hiring freeze for three positions, cancellation of the intern program (budgeted at $29,000) and reductions to nonprofit and program support. The city also proposed a utility rate adjustment to increase revenue by roughly $775,000 to cover water tank repainting, operations and debt service costs.

Council and staff discussed the city’s limited remaining developable acreage and the revenue impacts of a build‑out city, and agreed to pursue an organizational workforce and service‑delivery study to identify longer‑term savings.