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HomeMy WebLinkAbout2027 Recommended Budget Commission Presentations June 2CITY MANAGER’S RECOMMENDED 2027 BIENNIUM BUDGET JUNE 2, 2026 2027 Biennium Recommended Budget URD Districts and BID Budget Presentations May 12, 2026 Budget Document Distribution May 28, 2026 Work Session: Introduction, Internal Service Funds, & Enterprise Funds June 2, 2026 Work Session: General Fund & Special Revenue Funds June 9, 2026 Commission Budget Deliberation & Adoption June 23, 2026 COMMISSION AGENDA TIMELINE STEWARDSHIP OF PUBLIC FUNDS Accountability •Ensure public funds are managed transparently and responsibly. Compliance •Adhere to Montana law, adopted policies, and national accounting standards. Sustainability •Maintain the City’s financial health and ability to deliver services over time. 2027 Biennium Recommended Budget FRAMEWORK FRAMEWORK AND TOOLS FOR FINANCIAL MANAGEMENT Budget Prep & Adoption PROACTIVE Budget Monitoring Annual Financial Reporting TOOLS 2027 Biennium Recommended Budget •Fiscal policies •Mid to long range financial models •Government Finance Officer’s Association (GFOA) best practices BUDGET PREPARATION INTERNAL PROCESS 5-Year Capital Plan Created and Developed (Sep-Mar) Departments submit operating requests Revenue projected (Jan/Feb) 5-Year Capital Plan Adopted; City Manager reviews and makes preliminary budget approvals (March) Final budget balancing (April) Recommended Budget Document Preparation (May) Recommended Budget is presented and adopted (June) 2027 Biennium Recommended Budget WHAT SHAPES THE RECOMMENDED BUDGET City Manager’s Recommended Budget Revenue Availability / Affordability Commission Priorities, adopted plans and master plans Department Needs 2027 Biennium Recommended Budget 2027 BIENNIUM BUDGET THEMES Service Delivery & Growth Pressures Infrastructure Investment & Long-Term Capacity Cost Management & Financial Sustainability Organizational Capacity & Transparency CITY-WIDE OVERVIEW •Total Resources = $689.3M •Total Appropriations = $609.2M •Reserves = $80.1M 2027 Biennium Recommended Budget WHAT’S CHANGED SINCE LAST BIENNIUM? $485M $609M $40M $30M $54M $100M $200M $300M $400M $500M $600M 2025 Biennium Appropriations Operating Costs Capital Transfers 2027 Biennium Appropriations Appropriations Waterfall Chart 2025 to 2027 Biennium 2027 Biennium Recommended Budget APPROPRIATIONS BY SERVICE AREA 2027 Biennium Recommended Budget $9.0M $94.2M $251.6M $64.8M $73.9M $115.8M General Fund Subsidies Central Support Services Infrastructure & Utilities Community & Economic Development Community Livability Public Safety & Justice $50.0M $100.0M $150.0M $200.0M $250.0M $300.0M City-wide Appropriations by Service Area Total Appropriations = $609.2M WHERE THE MONEY GOES $28.1M $108.0M $127.6M $166.4M $179.0M Debt Service/Loans Internal Charges & Transfers Operations & Maintenance Salaries & Benefits Capital Outlay $20.0M $40.0M $60.0M $80.0M $100.0M $120.0M $140.0M $160.0M $180.0M $200.0M City-wide Appropriations by Type Total Appropriations = $609.2M 2027 Biennium Recommended Budget CITY-WIDE RESOURCES 2027 BIENNIUM Total Resources = $689.3M 2027 Biennium Recommended Budget $4.1M $4.4M $5.2M $15.4M $46.1M $46.2M $47.4M $62.0M $83.2M $105.9M $134.5M $134.9M Fines & Forfeitures Miscellaneous… Interest Income Licenses & Permits Transfers In Intergovernmental Special Assessments Internal Billings Debt Proceeds Taxes Charges for Services Beginning Balance City-wide Resources by Type ESTIMATED HOMEOWNER IMPACT - RECOMMENDED 2027 Biennium Recommended Budget 2027 Biennium Recommended Budget CENTRAL SUPPORT SERVICES / INTERNAL SERVICE FUNDS 2027 Biennium Recommended Budget INTERNAL SERVICE FUND RESTRUCTURING •Expanded use of Internal Service Funds •Shared support costs are fully allocated to departments based on usage •Improves transparency of full cost of service delivery •Aligns budgets with operational support needs •Enables more accurate comparisons across service areas 2027 Biennium Recommended Budget CENTRAL SUPPORT SERVICES DEPARTMENTS & FUNCTIONS Central Support Department Primary Services Supported Administrative Services (NEW)Finance, HR, IT, centralized administration Facilities Management (NEW)Facility maintenance and operations Vehicle Maintenance Fleet maintenance Public Works Administration Engineering support, GIS, asset management, utility billing Health-Medical Insurance Employee health insurance administration 2027 Biennium Recommended Budget CENTRAL SUPPORT SERVICES TOTAL APPROPRIATIONS 2027 Biennium Recommended Budget Central Support Services, $94.2M, 15%All Other, $515.0M, 85% City-wide Appropriations by Service Area $1.7M $2.1M $2.2M $2.8M $2.9M $4.1M $4.2M $4.3M $5.5M $5.9M $6.0M $8.0M $8.6M $8.9M Sustainability Utilities Admin PW Admin City Attorney HR GIS Engineering EDGE IT Vehicle Maint Finance Shops Complex City Administration Facilities $2.0M $4.0M $6.0M $8.0M $10.0M Central Support Services Appropriations excluding Health/Medical Insurance OPERATING DEPARTMENT VIEW OF CITYWIDE APPROPRIATIONS Public Safety & Justice 23% Community Livability 14% Community & Economic Development 13% Infrastructure & Utilities 50% Appropriations by Service Area after Central Support Services Allocations 2027 Biennium Recommended Budget 2027 Biennium Recommended Budget ENTERPRISE FUNDS 2027 Biennium Recommended Budget ENTERPRISE FUNDS SUMMARY 2027 Biennium Recommended Budget $12.7M $23.2M $23.6M $25.0M $89.7M Debt Service Internal Charges Ops & Maint. Salaries & Benefits Capital Outlay $20.0M $40.0M $60.0M $80.0M $100.0M Enterprise Funds Appropriations by Category $4.0M $6.5M $17.4M $66.3M $79.9M Parking Stormwater Fund Solid Waste Wastewater Fund Water Fund $20.0M $40.0M $60.0M $80.0M $100.0M Enterprise Funds Appropriations by Fund Salaries & Benefits, $1.3M, 32% O&M, $1.6M, 39% Capital, $0.6M, 15%Internal Charges, $0.6M, 14% Parking Appropriations by Category PARKING FUND Operations & Maintenance (O&M): •Parking rate study ($50k) •Kiosk replacements ($32k) •Garage lighting upgrades ($22k) $1.8M $2.1M $2.2M $2.3M $1.3M $2.0M $2.0M $2.0M $0.5M $1.0M $1.5M $2.0M $2.5M FY25 Actual FY26 Projection FY27 Projected FY28 Projected Parking Fund Revenue & Expenditure Trends Revenue Expenditure 2027 Biennium Recommended Budget Highlights: •4.0% rate increase in both years of the biennium o Increase of less than $10/year for a residential 35- gal tote •Electric gate installation ($40k) included in FY27 •FY27 is the final year of activities for the EPA grant that supports the Organics program SOLID WASTE ENTERPRISE FUND Debt, $0.7M, 4% Internal Charges, $5.5M, 31%Salaries & Benefits, $5.5M, 32% O&M, $5.7M, 33% Solid Waste Appropriations by CategoryResidential & Commercial Recycling & Organics Special Services (bulky item pickup, Bozeman program) 2027 Biennium Recommended Budget WATER FUND APPROPRIATIONS Water Operations, $23.8M, 30% Water Conservation, $2.7M, 3% Water Treatment, $53.4M, 67% 2027 Biennium Water Fund Appropriations by Division Water Conservation Water Operations Water Treatment Protect and enhance water resources through conservation Maintain, repair, and inspect water distribution system Provide safe and dependable potable water supply 2027 Biennium Recommended Budget Salaries & Benefits 11% O&M 11% Capital 63% Internal Charges 10%Debt 5% Water Appropriations by Category WATER FUND APPROPRIATIONS Highlights: •Recommended assessment increases: o FY27 – 9% (~$53 increase annually) o FY28 – 9% (~$58 increase annually) •New and replacement water meters ($1.2m) •Chemicals for safe drinking water ($610k) •Annual lake water purchases ($440k) •Insurance premiums ($333k) •Internal Charges increasing to pay for design of Shops Complex 2027 Biennium Recommended Budget $15.2M $16.9M $18.9M $19.4M $20.5M $21.7M $14.6M $14.8M $14.6M $16.7M $18.0M $18.5M $5.0M $10.0M $15.0M $20.0M $25.0M $30.0M $35.0M FY26 Projected FY27 Recommended FY28 Recommended FY29 Projected FY30 Projected FY31 Projected Water Fund: Rate Revenues and Operating Expenditures Rate Revenue Expenditures less Capital Beginning Fund Balance WATER SIX-YEAR PROJECTIONS FY26 Actual FY27 Projected FY28 Projected FY29 Projected FY30 Projected FY31 Projected Revenue Increases 10%9%9%3%3%3% 2027 Biennium Recommended Budget $20.9M $21.7M $58.6M $32.9M $24.6M $35.7M $30.4M $23.1M $56.8M $33.5M $31.8M $33.0M $10.0M $20.0M $30.0M $40.0M $50.0M $60.0M $70.0M FY26 Projected FY27 Recommended FY28 Recommended FY29 Projected FY30 Projected FY31 Projected Water Fund: Revenues, Expenditures, and Fund Balance Revenue Expenditures Beginning Balance WATER SIX-YEAR PROJECTIONS FY26 Actual FY27 Projected FY28 Projected FY29 Projected FY30 Projected FY31 Projected Revenue Increases 10%9%9%3%3%3% 2027 Biennium Recommended Budget Total deficit over six years with rate/revenue increases is approximately $14M. WASTEWATER FUND APPROPRIATIONS Wastewater Operations, $33.5M, 51% Wastewater Reclamation Facility, $32.8M, 49% Wastewater Fund Appropriations by Division Protect and enhance water quality of the East Gallatin River Maintain, repair and replace sewer infrastructure to minimize interruption and promote public health and safety. Water Reclamation Facility Wastewater Operations 2027 Biennium Recommended Budget Salaries & Benefits 11% O&M 11% Capital 56% Internal Charges 10%Debt Service 12% Wastewater Appropriations by Category WASTEWATER FUND APPROPRIATIONS Highlights: •Recommended rate increases: o FY27 – 3% (~$20 increase annually) o FY28 – 3% (~$21 increase annually) Operations & Maintenance (O&M): •Contracted services including utilities locates, software, maintenance, engineering, and lab analysis ($2.1m) •Debt issuance costs ($661k) Internal Charges: •Increasing to pay for design of Shops Complex 2027 Biennium Recommended Budget $13.9M $14.7M $15.5M $16.3M $17.2M $17.7M $12.1M $14.1M $15.1M $15.5M $15.5M $15.9M $2.0M $4.0M $6.0M $8.0M $10.0M $12.0M $14.0M $16.0M $18.0M $20.0M FY26 Projected FY27 Projected FY28 Projected FY29 Projected FY30 Projected FY31 Projected Wastewater Fund: Rate Revenues and Operating Expenditures Rate Revenue Expenditures Beginning Fund Balance WASTEWATER SIX-YEAR PROJECTIONS FY26 Actual FY27 Projected FY28 Projected FY29 Projected FY30 Projected FY31 Projected Revenue Increases 6%3%3%3%3%3% 2027 Biennium Recommended Budget $22.9M $39.4M $29.9M $21.6M $18.8M $28.7M$29.6M $36.7M $29.6M $21.8M $21.1M $30.2M $5.0M $10.0M $15.0M $20.0M $25.0M $30.0M $35.0M $40.0M $45.0M FY26 Projected FY27 Recommended FY28 Recommended FY29 Projected FY30 Projected FY31 Projected Wastewater Fund: Revenues, Expenditures, and Fund Balance Revenue Expenditures Beginning Fund Balance WASTEWATER SIX-YEAR PROJECTIONS FY26 Actual FY27 Projected FY28 Projected FY29 Projected FY30 Projected FY31 Projected Revenue Increases 6%3%3%3%3%3% 2027 Biennium Recommended Budget STORMWATER FUND APPROPRIATIONS Rate Revenues: •FY27 – 15% (~$9 increase annually) •FY28 – 6% (~$4 increase annually) Operations & Maintenance: •Increases to contract costs ($14k) •DEQ permit fee ($7k) •Debt issuance costs ($6k) Internal Charges: •Allocation of Shops Complex design 2027 Biennium Recommended Budget $2.2M $2.9M $2.9M $3.1M$3.0M $3.8M $3.1M $2.8M FY25 Actual FY26 Projection FY27 Projected FY28 Projected Stormwater Revenue & Expenditure Trends Revenues Expenditures Salaries & Benefits, 31%O&M 8% Capital 23% Debt 8%Internal Charges 30% Stormwater Budget by Category $2.9M $2.9M $3.1M $3.5M $3.3M $3.5M$3.8M $3.1M $3.5M $3.4M $3.3M $3.5M $0.5M $1.0M $1.5M $2.0M $2.5M $3.0M $3.5M $4.0M FY26 Projected FY27 Recommended FY28 Recommended FY29 Projected FY30 Projected FY31 Projected Stormwater Fund: Revenues, Expenditures, and Fund Balance Revenue Expenditures Beginning Fund Balance STORMWATER SIX-YEAR PROJECTIONS FY26 Actual FY27 Projected FY28 Projected FY29 Projected FY30 Projected FY31 Projected Revenue Increases 3%15%6%5%5%3% 2027 Biennium Recommended Budget RATE COMPARISONS - MONTANA $49.04 $53.46 $43.34 $36.83 $34.92 $46.96 $38.22 $- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 Bozeman* Bozeman Recommended** Belgrade** Billings** Great Falls* Kalispell** Missoula** Water Bill Comparison 2027 Biennium Recommended Budget *Rates effective in FY26 **Rates effective in FY27 RATE COMPARISONS - MONTANA $55.55 $57.19 $78.39 $41.38 $42.21 $68.00 $23.72 0 10 20 30 40 50 60 70 80 90 Bozeman* Bozeman Recommended** Belgrade** Billings** Great Falls* Kalispell** Missoula** Sewer Bill Comparison 2027 Biennium Recommended Budget *Rates effective in FY26 **Rates effective in FY27 RATE COMPARISONS - MONTANA $8.80 $10.12 $8.81 $22.25 $5.58 0 5 10 15 20 25 Bozeman* Bozeman Recommended** Billings** Great Falls* Missoula** Stormwater Bill Comparison Column1 Column2 Stormwater 2027 Biennium Recommended Budget *Rates effective in FY26 **Rates effective in FY27 2027 Biennium Recommended Budget TRANSPORTATION DEPARTMENT BUDGETS Street Maintenance, $25.4M, 47% Lighting Districts, $1.1M, 2% Street Impact Fees, $9.0M, 17% MPO, $1.2M, 2% Arterial & Collector District, $13.3M, 24%Gas Tax, $4.2M, 8% Transportation Appropriations by Fund Salaries & Benefits, $8.4M, 15% Ops & Maint., $5.8M, 11% Capital Outlay, $29.1M, 54% Internal Charges, $9.2M, 17% Debt Service, $1.7M, 3% Transportation Appropriations by Category 2027 Biennium Recommended Budget GAS TAX FUND 2027 Biennium Recommended Budget •Allocation from the state based on a combination of population and maintained road miles •Pays for Street Preservation for approx. 320 lane miles o Street annual chip/friction sealing o Mill and overlay o Associated road supplies •Full compliance with State BARS chart of accounts $2.1M $2.1M $1.9M $2.3M $0.5M $1.0M $1.5M $2.0M $2.5M FY27 Budget FY28 Budget Gas Tax Fund Revenue & Expenditure Trends Revenue Expenditures STREET MAINTENANCE SPECIAL ASSESSMENT DISTRICT Highlights: •Recommended assessment increases:o FY27 – 8% ( ~$24 increase annually)o FY28 – 6% ( ~$20 increase annually) •Planning for 40 additional miles of City-maintained streets in the next five years •Two Streets Operators in FY28 •$300k annually supports multi-model improvements to support Commission’s priority to advance multimodal transportation improvements •Debt proceeds planned for: o Street Sweeper ($400k in FY27) o Grader ($400k in FY27) o Lift Truck ($275k in FY27) o Light Duty Replacement ($120k in FY27) o Loader Truck ($275k in FY28) o Tandem Axle Dump Truck ($375k in FY28) $11.9M $12.2M $12.2M $11.9M$12.4M $14.7M $13.0M $12.4M $2.0M $4.0M $6.0M $8.0M $10.0M $12.0M $14.0M $16.0M FY25 Actual FY26 Projected FY27 Budget FY28 Budget Street Maintenance District Revenue & Expenditure Trends Revenue Expenditures Beginning Balance 2027 Biennium Recommended Budget 2027 Biennium Recommended Budget FORESTRY (TREE MAINTENANCE) Highlights: •Recommended assessment increases: o FY27 – 15% (~$5 increase annually) o FY28 – 8% (~$3 increase annually) •Internal Charges increasing to pay for design of Shops Complex Salaries & Benefits 51% Operations 17%Capital 9% Internal Charges 21% Debt Service 2% Forestry Appropriations by Category $1.1M $1.1M $1.4M $1.3M $1.0M $1.4M $1.5M $1.5M $0.2M $0.4M $0.6M $0.8M $1.0M $1.2M $1.4M $1.6M $1.8M FY25 Actual FY26 Projected FY27 Projected FY28 Projected Forestry (Tree Maintenance) District Revenue & Expenditure Trends Revenue Expenditures Beginning Fund Balance 2027 Biennium Recommended Budget $6.8M $7.8M $9.1M $14.5M $11.3M $10.7M $2.0M $4.0M $6.0M $8.0M $10.0M $12.0M $14.0M $16.0M FY26 Projected FY27 Budget FY28 Budget Parks & Trails Financial Trends: Assessment Revenues and Operating Expenditures Assessment Revenue Total Expenditures Fund Balance PARKS & TRAILS FINANCIAL TRENDS 2027 Biennium Recommended Budget Highlights: •Amounts remaining available for capital are between $500k and $700k for each year. •Significant projects in the biennium: o Bikefill Community Park ($1.3m) – added appropriations for $750K from Land, Water, Conservation Fund Grant ($500k) o Fleet/equipment replacements ($943k) o Playground/skate park improvements ($625k) o Trail connectivity ($500k) o Pickleball courts ($475k) •Internal Charges increasing to pay for design of Shops Complex •Recommended assessment increases: o FY27 – 15% (~$33 increase annually) o FY28 – 15% (~$38 increase annually) ESTIMATED HOMEOWNER IMPACT - RECOMMENDED 2027 Biennium Recommended Budget 2027 Biennium Recommended Budget URD Districts and BID Budget Presentations May 12, 2026 Budget Document Distribution May 28, 2026 Work Session: Introduction, Internal Service Funds, & Enterprise Funds June 2, 2026 Work Session: General Fund & Special Revenue Funds June 9, 2026 Commission Budget Deliberation & Adoption June 23, 2026 COMMISSION AGENDA TIMELINE