Thank you, Marion Council.

Good evening.

We're really excited to be here.

If you know me at all, you know I do love a good budget meeting.

So uh excited to dive into the twenty twenty-seven recommended budget in anticipation of our public hearings that occur in October.

So this is really to set the stage for um you know, high level kind of what we're seeing as far as um revenues coming in, some of the trends we're seeing with our major revenue sources, talk a little bit about our expenses and the large driving forces behind our expenses.

And then yeah, we tried to uh switch it up this year for the first time that I've been here at least, and uh uh give the stage over to all of our department heads so you hear less of me and uh how they're talking and more of them.

So they're gonna be going over each of their kind of departments, how they're funded, which is kind of always interesting to see where their expenses largely lay, and then some of their priorities and anticipate a 2027 budget request.

So yes, I would greatly appreciate it, and hopefully the sheet helps you kind of get your thoughts organized.

Um if we can get through all the departments, we practice this, so it'll go just as smoothly as it will uh having 15 people come up and present.

But I first want to um thank all of the staff that um here and also behind the scenes that went into doing this budget.

It takes um a village, as they say, to put something together and so we have finance to hear staff that led a large portion of all the number crunching, obviously the department has uh played a huge role in this, but also people within their departments that you don't see, so just uh thank you.

So real briefly, um as you have seen, but it's always very important to set out how the charter lays out what our responsibilities are.

So as the city manager, I'm responsible in working with the department heads.

Everyone here behind you in uh preparing a balanced budget.

And then as council, you get a decide and adopt on that budget.

Any budget adjust adjustments throughout the year.

You also set various revenue streams.

So you set the mill levels and you set uh various uh fees.

Um and if you recall late last year, we also updated those so that you guys have a discrete set of fees that you set my ordinance.

So that'll be the first time we're doing this holistically um this year.

Uh you know, for a philosophy, I like to always say that um the first thing is really reflecting what the uh council is looking for, making sure that it aligns with our community values.

Um I just give the example is each community has different values, for example, like the arts and sustainability for it, size our city is a little bit more investment than maybe another city.

But that's what our community values, and so we really want to make sure that we maintain those services.

Um I never want to go to budget jail.

I don't know what it looks like, but I don't imagine it's very fun.

So we want to make sure that we and you all stay in legal compliance by balancing our budget, and then really maintaining it to be a flexible document.

I like to say it's a living document, things happen throughout the year, and so uh we always are monitoring those um revenue streams, expenses, making sure and pivoting if we need to and coming back to council.

So looking in 2027, really focusing on core uh services here, maintaining what we have, and then I think if you recall in our June workshop, we presented a chart where over the last several years we had been using in the general funds and fund balance to draw that down.

We're really proud that this budget does not touch into the one-time fund balance, and so we're really aligned those ongoing with ongoing.

So aligning those to maintain our means.

And then we do have several restricted funds, so we're really evaluated, making sure that any item that's eligible for restricted funds is being used by restricted funds, and then obviously balancing affordability.

Uh CFO Balzer is going to touch on a little bit about some of the economic insertion that we're facing.

So we really want to make sure that we're balancing affordability with the cost of running our city.

So here's where we are at tonight.

Uh we're in August, so the budget seemingly lasts almost all year for us, but for council and for the community, this is really the first daylight of the annual budget.

In September, you will receive the budget book that's uh outlined in charter.

It'll be by Friday, September 18th.

We'll also be doing a CIP tour at your workshop in September, so more to come on that, and then your public hearings are held in October, and you have a requirement to adopt a uh budget by the last fourth Thursday of the month.

So with that, I'm gonna turn it over to CFO Polter.

All right.

So here's just an overview.

Our 2027 projected revenue uh is 128 million.

You can see uh that's largely um revenue by type, sales and use tax, utility fees, property taxes, um, and then revenue by fund, so the largest fund with revenues, general fund, uh, then the utilities as well as special revenue funds and capital projects.

And then this is a breakdown of the general fund revenue.

So as you can see, the majority of this is sales and use tax and property tax and then other revenues, which is largely charges for services.

So, you know, the tax piece is the largest portion of our general fund revenue.

And then sales sales tax summary, so focusing on sales tax now.

Um 2026 sales tax overview.

The city expects a 7% increase in sales tax in 2026 as compared to 2025 actuals.

And then we're projecting an increase of 3% in 2027.

The 2026 increase is primarily due to the non-mile revenue sharing agreement.

This is 2026 is the first full year of distributions related to that agreement, which is why 2026 is a little bit larger there.

Uh the city forecasts again uh the 3% for 2027, which is moderate as consumers.

We anticipate consumers pulling back on discretionary spending.

Use tax summary.

Uh this is an overview of the use tax components.

So we have building use tax, motor vehicle use tax, and business use tax.

Uh the base budget uh is anticipated annually, but the amount projected over the base is uh very much volatile and variable changes often, as you can see by the numbers and the year-to-year change.

Um, so we're forecasting it to increase in 2027 over 2026, as 2026 was down, or it's projected to be down over those um actual audit revenue summary.