On Friday, May 8, 2026, the Rochester City Council held a Budget Retreat in Council Chambers to review the FY27 Annual Budget.

The format of the retreat was established for department presentations in order to promote discussion and collaboration between Council and staff on the proposed budget. An opportunity for public input followed the department presentations, followed by Council deliberations and any initial adjustments. Council acted as a committee-of-the-whole in accordance with Section 41 of the City Charter, and any adjustments made during the retreat serve as recommendations to the full City Council for budget adoption.

City Manager Katie Ambrose noted that additional opportunities for deliberations and adjustments will take place during the May 12 and May 19 Committee of the Whole Budget Workshops. Public hearings are scheduled for May 19, and budget adoption is currently scheduled for May 26, with June dates available if necessary.

The proposed FY27 budget is $175,168 below the tax cap. The proposed budget represents a 0.79% total increase over the current year and includes Enterprise and Special Revenue Fund appropriations, which increased by 5.37% and do not impact the tax cap. The City also receives multiple sources of non-property tax revenues, which make up 44.51% of the proposed FY27 General Fund budget.

As part of the budget process, the Issues & Options book identified all Issues & Options requests submitted by departments. These requests reflect Operating & Maintenance increases exceeding a 3% increase, as well as new, expanded, or reclassified positions. Departments presented both included and excluded submissions during the retreat.

City Manager Ambrose reported that 20 Issues & Options requests totaling $1,432,309 were submitted. Of those requests, 11 totaling $141,351 were included in the proposed budget, and 9 totaling $1,290,958 were excluded. Ambrose stated that while all submitted Issues & Options are needed and impactful, included items prioritized equipment and positions of highest impact within the limits of available resources this year.

The proposed FY2027 Capital Improvements Program budget across all funds reflects a decrease of $14,372,562 from the prior year. Departments had previously presented projects through the Capital Improvements Program Committee process, which resulted in final project rankings based on nine evaluation criteria. Ambrose stated that those rankings were taken under advisement in developing the proposed FY27 CIP budget.

The proposed budget also includes the use of $5 million in General Fund unassigned fund balance. According to Ambrose, the allocation of General Fund unassigned fund balance in the budget has been in practice since at least 2005 and has been intentionally reduced from a previous high of $7.9 million. Last year’s budget appropriated $6.2 million, while this year’s proposal holds firm at $5 million in support of continuing efforts to operate within the confines of the tax cap without generating a large spike in the tax rate.

The proposed Capital Improvements Program includes $2,827,500 in cash-funded CIP projects, with $1.5 million appropriated for paving, $2 million appropriated for bonded paving, and an additional $125,000 in cash CIP funding for the pavement preservation program. Ambrose stated that the proposal aligns with the Council’s commitment to its paving funding strategy, including increasing annual cash CIP paving appropriations over time while cycling larger bonded appropriations as needed.

As proposed, the estimated tax rate impact of the FY27 Proposed Budget is $0.63.

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