Hello, and welcome to our Tuesday evening uh workshop.

We're kicking things off with a budget presentation.

We have Director Roy here, who will be uh joined uh shortly uh by administrator Kane Wrath.

And uh, if you two can please kick it off, that'd be great.

We're proceeding, please proceed.

Okay, good evening, mayor counselors, uh Brian Cameron, the administrator.

So we are here this evening to present the fiscal year twenty seven uh proposed budget.

So I will just say at the outset, this was a very uh difficult budget, and we are just beginning that process here with the council, but we faced uh a number of headwinds in seemingly in every direction this year, um, as we'll illustrate during this presentation.

So this was uh a very challenging budget, will be a very challenging budget going forward over the next few months.

Um, the city of Lewis is not alone in a lot of these challenges.

When you look at our neighboring communities and really communities across the country, uh, many are in the same position with regard to increasing costs really all over the place.

So uh to start out, our proposed municipal budget for twenty seven is seventy-three million seven fifty-seven and thirty-five dollars.

That is the municipal city uh side of things, not the school department.

We'll get to uh in a moment.

But you'll see the city operating budget uh is up 7.1 percent.

The county budget is up 20.5 percent, debt services up 13.3 percent.

These are uh really difficult numbers, and we'll dig more into that in a moment.

Um but the first big uh point I want to really stress is the numbers you see the 7.1 percent on the city operating.

That is after we've already taken from what was submitted to us from department budget requests.

We've already cut 4.1 million dollars uh from that just to get down to 7.1.

So there's already been uh a really you know uh quite a bit of work done uh on our side and with department heads to find cuts to find savings.

Our primary concern was not having to go to layoffs to make sure that positions that are currently occupied with people would continue to be funded uh for the next year.

Um we'll see at a moment though we are going to talk about freezing open positions.

But uh so that was one primary focus, um, but we've already found 4.1 million dollars in savings.

Um to be honest, we may have to find some more, but that brought us down to the 7.1%.

So these are some of the reductions.

I don't know if we'll have to go through all of these.

We can we're also gonna email this presentation to you all so you can look at it later also.

But um, we are proposing another uh almost a million dollars in freezing an additional six open positions.

There's a hundred thousand dollars in savings, electrical repairs to signals, fifty-eight thousand construction materials, hundred thousand dollars in highway and street line painting, forty-five thousand dollars in parks and open space, forty-two thousand for armory uh ongoing uh renovations, and also an informational sign that we're gonna place in the front.

250,000 out of uh the small business grant program, there's $58,000 in public art.

Some of these we looked at, and they already have some other funds they're able to use, so it's not completely decimating uh these budgets, but none of these cuts are easy.

None of them are fun, um, but we really got to the point of it's either people in seats or it's some of these other items.

Uh there's also 240,000 removed from the salary reserve fund.

So we also um went through capital.

Uh some of these have been shifted to the uh LCIP.

Um there's police vehicles, um, there's a port account machine at the fire department in public works.

There's a whole variety of things from guardrails to weight system replacement, um, waste disposal, roll-off containers, uh, parks and open spaces again, trees, dugouts, play equipment, municipal garage, there's vehicles, one point almost 1.7 million dollars uh in vehicles there that we had to take out, and also smaller items like $20,000 in office equipment uh citywide.

So some of the major budget drivers, you know, what has caused us to land uh in this place, uh, a number of things.

Uh, first of all, most of our workforce is uh under labor contracts, those contractual increases are something we grapple with every year, so that's number one.

Uh but there were other costs uh including workers' comp, uh rising health insurance rates, uh, retirement software maintenance and licensing.

That was another big one.

The county budget again this year at 20.5% uh increase, very significant, about a million dollars just on that.

Uh the police building, uh, lease payments.

We also saw this was significant.

There was a drop in uh state revenue sharing that communities are facing this year.

That was just over a million dollars this year, also.

We also had a heavy use of fund balance in the FY26 budget, and you'll see later in this presentation.

Um, we don't have that option, or it's not recommended this year that we're utilizing any fund balance at all in this budget, and that was uh over just over seven million dollars, correct, last year in the use of fund balance.

So that's 7 million.

We had you know this year is coming is coming home to roost also.

So continuing with our expenditures, uh personnel expenditures.

Again, we just mentioned all of those contractual obligations, about 1.2 million fringe benefits were up another um about $550,000.

So the proposed FY26 frozen uh positions are continuing for 27, those two police officers at $96,000 each, three Class C highway workers at $66,000 each, and one mechanic three at $95,000.

So this year for 27, we're we're proposing um additional frozen freezing uh open positions, including another police officer, $97,000 from public works, two Class C highway workers, one Class B highway worker, one mechanic, as well as one senior accountant uh in finance.

That brings our total frozen positions up to 12, which is significant.

So again, frozen positions, these are currently vacant positions that are budgeted.

We're proposing not filling them and freezing them for the current fiscal year.

So we're we're continuing to freeze the ones from 26.

We're adding on some more for 27.