Good afternoon, everyone.

We're going to call this meeting to order at two oh six PM on what is it?

September first.

Wow.

Of twenty twenty-six.

Uh to start this meeting off, uh, we will I'll have some remarks and then I'll turn it over to our deputy finance director.

I would like to thank our local and state elected officials that are here today.

Thank you for taking time to show up, listen, and help us at the state level.

We do have Representative Tara Johnson and Representative Jill Billings here today.

So thank you for coming.

The City of Lacrosse 2027 executive budget reflects a focused effort to maintain high quality services while navigating the real financial constraints placed on municipalities.

Departments made intentional staffing adjustments, restructured operations, and streamlined efficiencies to reduce ongoing costs.

Public safety remains a priority, but reforms were necessary to maintain staffing and service levels aligned with our economic reality.

Looking ahead, I will ensure we continue developing long-term strategies to strengthen financial stability, including exploring services and personnel consolidation, identifying new revenue sources, and reducing redundancies.

Something that I did not mention.

Oh, what if estimates people are present?

A moment of truth.

All right.

Thank you all for bearing with us with the technical difficulties and director, it is on you.

Thank you.

Thank you.

All right.

So before we dive into the 2027 operating budget numbers, I just want to take a review of the budget process, the constraints, uh trends, and past budgets to better contextualize the 2027 operating budget.

So the first slide we'll start with is the operating budget process.

Okay, so the first part of the operating budget process was kicked off by the budget parameter committee that met a couple months ago and directed us to bring three scenarios to the Board of Estimates.

Scheduled for September 1st, September 2nd, October 12th, and October 13th.

And per core of ordinance approve a recommended budget by the third Tuesday of October.

That will get sent to the Common Council, which will hold public meetings on November 16th and November 17th.

To ultimately adopt the 2027 operating budget by the third Tuesday in November.

First one is the levy limit, which is a property tax revenue growth constraint that is based on net new construction.

This is an expense growth constraint.

This allows the operating expenses of the general fund to grow by an inflation factor.

And just to clarify on operating expenses, that would be the total general fund expenditures minus our debt service expenses.

Participation in this program is tied to a historically $1.1 to $1.6 million state aid payment.

And the third constraint that we operate under is maintenance of effort, which is a requirement of municipalities to maintain current spending and service levels for public safety.

Okay, next I'm going to get into kind of the budget trends on the revenue side.

And then on the left, you'll see the dollar amounts of the budget and numbers for the 2027 proposed.

Okay.

Then I'm going to detail uh the property tax revenue source a little more and its relation to the limits.

So state levy limits imposed restrict property tax growth to the net new construction percentage.

And the two graphs on your right, uh the top one shows our the last seven to eight years of our net new construction percentage.

And then the graph below that shows the dollar increase, uh showing how much we would be able to increase our levy year to year in a dollar form.

So as you can see, our trend has since 2021 has been steadily declining towards zero as far as our net new construction percentage.

Now the city does still retain the ability to raise more uh than the net new construction at this point in time uh through the debt levy adjustment.

But at some point in the future, we will run out of that capacity and would be held to this um constraint.

So if we were operating under that constraint, for 2027, our net new constriction, net new construction limit of 0.381% would allow us to increase the levy by 144,000.

And just a couple of notes, we did start, we didn't start using the debt levy adjustment until the 2022 budget.

And we currently have about 11 million dollars in capacity to raise for the debt levy limit.

Okay, I'll move on to the budget trends with expenses.

So just like the revenues, I have a pie chart showing on the right, uh broken down by expense type in percentage.

Um this is on operating expenses, so the top cost drivers of operating expenses.

So just to refresh, that would be our total budget of 76 million minus our debt expenses.

And then on the left, I have it broken down into with the percentage and the dollar amount, and I've also detailed any expense type that is over 1% of our budget.

So to point out here, um, the big number out there is 78% of our operating expenses are personnel related, which would be salary and benefits.

And the other uh big chunk would be 15.6% of contracted services.

Okay, then on the next slide, um, kind of tie that into the expense budget limits.

So the expenditure restraint program allows operating expenses to grow by the annual inflation factor as of August 31st, plus 60% of the net new construction rate, which as you can see continues to go down for the city of lacrosse.

Uh so built into this 2027 proposed budget that we'll go through.

The budgeted amount is 3% increase per ERP guidelines, which would equal $1.9 million allowable growth and operating expenses.

And then right below that, I just kind of from the previous slide I had identified here's our top cost drivers.