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Page 3 of 12 <br /> <br /> <br />Equipment/Building Replacement Fund <br />Council also directed staff to incorporate the below changes to the Equipment/Building <br />Replacement Fund: <br /> Equipment/Building Replacement. $0 Change in Fund Balance <br />o Expense. Delayed the 1993 Case 621 Loader to 2027 and delayed the 2013 Ford <br />Escape to 2027. No Fund Balance impact. <br />Staff will bring forward an equipment replacement plan to Council in March 2026. This <br />plan will feature a leveled cost structure for further discussion. <br /> <br />Background – Tree Preservation and Landscaping Fund <br />Due to the strong demand and positive feedback around the 2025 Tree Trust Partnership pilot <br />program, Tree Trust has asked the City to continue its tree sale partnership, which promotes <br />environmental sustainability. The 2026 cost is estimated to be $6,750. Council’s consensus at the <br />August 25 Special Work Session supports the continuation to partner with Tree Trust and funding <br />to come from the Tree Preservation and Landscaping Fund. <br /> <br />Background – General Fund Budget <br />Annually, City staff prepares and submits a preliminary budget to the City Council for review and <br />feedback. Attached to this memo is the City’s preliminary General Fund budget for the 2026 fiscal <br />year. Each department provided their respective forecasts for this budget. <br /> <br />The proposed 2026 budget is $7,518,589, an increase of $757,310 or 11.2%. For the purpose of <br />this discussion, there is a 15.0% or $906,103 tax levy increase reflected in the budget, of which <br />$754,103 for the General Fund, $100,000 for the EDA Fund, and $52,000 for the Public Safety <br />Capital Fund. As presented, the General Fund Budget is underfunded by $122,009, which is the <br />budget shortfall projected in the 2025 budget. This practice is not sustainable in the long term. A <br />tax levy increase of 17.1% or $1,028,112 would be needed to balance the budget in 2026. The table <br />below shows the amount the General Fund Budget is underfunded at different tax levy increase <br />amounts. <br /> <br />Tax Levy Increase Underfunded Amount <br />5% $726,711 <br />10% $425,310 <br />13% $244,470 <br />14.8% $122,009 <br />17.1% $0 <br /> <br />Wages and Benefits <br />The 2026 preliminary budget is currently being prepared which assumes a 3.0% wage adjustment <br />for all staff. Below is a table showing the recent history of approved COLA’s. <br /> <br />Year Non Union IUOE Union <br />2025 3.00% + addition of P&R Mgr 7.00% + 2 PW Lead Promotions <br />2024 3.00% 3.00% <br />2023 3.00% 3.00% <br />2022 3.00% 3.00% + addition of Fleet Lead <br />2021 2.00% 3.00% <br />2020 3.00% Market Adjustment; Minimum increase was 5.80%