FY26 Proposed Budget

recreation projects, many of which implement the Parks & Recreation Gather Here Master Plan. The FY 2026 budget includes funding for shelter and restroom replacements at City Park, softball field renovations at Napolean Park, playground replacement at North Market Square Park, and new park amenities at Palisades Park. Funding is also provided in fiscal years 2025 and 2026 for the replacement of City Park Pool and for initial step towards establishing a new park west of Highway 218. This budget also continues implementation of the Bicycle Master Plan through annual multimodal investments in our transportation network. The Climate Action Plan also remains a priority, despite the State’s elimination of the Emergency Property Tax Levy which previously funded climate operations. This budget continues incorporating Climate Action activities in the General Fund to help achieve our Climate Action and Adaptation goals. Sustainability programs in the FY 2026 budget include over $300,000 for residential energy efficiency grants, HERS grants to homebuilders, community climate action grants, implementation of the resilience hub program, and additional programs, partnerships, and events. The City’s sustainability efforts are also incorporated into other various master plans and capital projects such as tree plantings, prairie management, fare-free transit, multi-modal roadway improvements, and waste reduction programs. While the FY 2026 budget invests in implementing Council’s Strategic Plan and supporting master plans, it also seeks to exercise appropriate caution by limiting service expansion plans, holding external organizational funding flat, and shifting expenses away from property taxes to other suitable options. This is in direct response to the pressures of the current fiscal environment and uncertainties created by continued property tax reform. These pressures are expected to compound over the next few fiscal years, so exercising restraint and caution today will help avoid what may be more significant cost reduction steps and negative service impacts in the future. Most notably, this budget delays the pursuit of Fire Station #5 as it is clear that the City cannot financially support the service expansion in this budget environment. To support future staffing needs, the fiscal year 2024 and 2025 budgets included the over-hiring of two firefighter positions in addition to $700,000 in contingency for future positions. While the FY 2026 budget maintains the two over-hire positions, the contingency for future positions is reduced to $300,000 to help shrink the annual General Fund deficit, which is projected at $2.6 million. The City will continue to evaluate the feasibility of a new fire station as the effects of property tax reform become clearer, but in the meantime, we will continue to provide exceptional fire protection and emergency medical services with a four-station foundation. The FY 2026 budget also makes changes to the funding source of several value-add investments. The budget proposes an $800,000 General Fund transfer to the Affordable Housing fund rather than the $1,030,000 provided in FY 2025. This reflects removal of the Low Income Housing Tax Credit (LIHTC) match from the distribution model. Removing this expense from the property tax dependent General Fund eases pressures on the deficit and forestalls municipal service reductions. The City intends to shift support of LIHTC projects by utilizing tax increment financing. Similarly, property tax support for the City’s Social Justice and Racial Equity grant program is projected to drop $25,000 to a total of $75,000. The reduction in property tax support can be Exercising Caution with Service Expansion and External Funding Support

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