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REQUEST FOR COUNCIL ACTION Date: 4/20/2026 Item No.: 7.a. Department ApprovalCity Manager Approval Item Description:Discuss 2027 Budget and Implementation of City's Strategic Plan 1 2 Background 3 As the City begins to work on the 2027 budget, staff is facilitating an early discussion on 4 2027 budget pressures and to discuss priorities for the upcoming budget. The approved 5 strategic plan, which was informed by the community, provides good guidance on what 6 programs and initiatives could be part of the upcoming budget. One of the goals of the 7 strategic planning process was to align the priorities and goals identified in the plan with the 8 City budget. While it is not practical or financially feasible to include every priority and goal 9 in one single budget, thoughtful consideration of the strategic plan priorities should be part 10 of the budget consideration. 11 12 With that in mind, the City Manager will be facilitating a discussion at the April 20th City 13 Council work session about the 2027 budget. At the work session, we will discuss that a 14 budget is more than just numbers — it provides the opportunity for community members to 15 have a better quality of life; review a financial analysis prepared by the Finance Director 16 and City Manager showing the expected budget and levy increases based on continuing 17 the existing programs, services, and personnel included as part of the 2026 budget; and a 18 discussion on budget themes centered around the strategic plan that Department Heads 19 have identified as needing to be addressed in the near future. 20 21 Based on the financial analysis prepared by the Finance Director and City Manager, a 22 9.69% levy increase will be needed to continue funding for what was approved as part of 23 the 2026 budget. This projection is based on estimated personnel, supply, equipment, and 24 contractural services cost increases. This estimate does not include any new personnel, 25 programs, services, or equipment for 2027. 26 27 Understanding that the estimated levy increase is much larger than anyone would like to 28 see at this stage, the following should be noted: 29 30 1) The projected levy increase fully incorporates the costs of adding the 22 public safety 31 personnel positions that were part of the 2026 budget. 32 33 2) Department Heads have not begun working on their 2027 budget requests, which will 34 give them a better opportunity to look at their budget to include actual costs, both up and 35 down from this estimate, and consider cost efficiencies and reductions, and alternative 36 revenue sources to balance new cost drivers. Page 1 of 3 Qbhf!3!pg!82