City Council - Regular Meeting

Welcome to our meeting. The date is September 8, 2026. The time is 6.30 p.m. This is an open meeting of the Grand Island City Council. The City of Grand Island abides by the Open Meetings Act in conducting business. A copy of the Open Meetings Act is displayed in the back of this room as required by state law. Now I ask that you join us in the Pledge of Allegiance.

I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

The clerk will now perform roll call.

Council Member Sheard.

Present.

Council Member Stelk.

Present.

Council Member Conley.

Present.

Council Member Nickerson.

Present.

Council Member Brown.

Present.

Council Member Haase.

Present.

Council Member Mendoza. Present. Council President O'Neill.

Present.

Council Member Lanphier.

Present.

And Mayor Steele.

Present, also present are Jill Grenier, the city clerk, Patrick Brown, the city administrator, Chelsea Steinke, the finance director, Carrie Fisk, the city attorney, and Keith Kurtz, the public works director. Individuals who have appropriate items for city council consideration should complete the request for future agenda items form located at the information booth. If the issue can be handled administratively without council action, Notification will be provided. If the item is scheduled for a meeting or study session, notification of the date will be given. A sign-up sheet was available in the lobby for individuals wishing to provide input on any of tonight's agenda items. If you did not sign up to speak on an agenda item, please come forward, state your name, and the agenda topic on which you will be speaking. No one has come forward, so we shall continue. The purpose of this meeting is to comply with the requirements of Nebraska Revised Statute, Section 13-506, as amended by Laws 2020, LB 148, which requires each governing body shall each year or biennial period conduct a public hearing on its proposed budget statement. Such hearings shall be held separately from any regularly scheduled meeting of the governing body and shall not be limited by time. Notice of the place and time of such hearing, together with a summary of the proposed budget statement, shall be published at least four calendar days prior to the date set for hearing in a newspaper of general circulation within the governing body's jurisdiction. At such hearing, the governing body shall make at least three copies of the proposed budget statement available to the public and shall make a presentation outlining key provisions of the proposed budget statement, including, but not limited to, a comparison with the prior year's budget. Any member of the public desiring to speak on the proposed budget statement shall be allowed to address the governing body at the hearing and shall be given a reasonable amount of time to do so. After such hearing, the proposed budget statement shall be adopted or amended and adopted as amended and a written record shall be kept of such hearing. The amount to be received from personal and real property taxation shall be certified to the levying board after the proposed budget statement is adopted or is amended and adopted as amended. There will be no council action taken during this meeting. We'll now take up agenda item 6A, public hearing on fiscal year 2026 to 2027, annual single city budget and annual appropriations bill. Mr. Brown.

Thank you, Mayor. Good evening, Council. This is our budget review for the fiscal year 2027. The financial challenge ahead before us, general fund revenue growth is slowing while the cost of government is increasing. At the same time, the cost of providing municipal services continue to increase. Our revenue sources are decreasing or slowing. Labor, health insurance, equipment, construction, supplies, fuel, technology, and other operating costs have increased significantly. The result is a widening gap between revenue growth and expenditure growth. Where we are today for fiscal year 27 budget. General fund revenues, 54.3 million. Personnel services, 41.6 million, that's net. Operating expenses, 10.3 million, that is also net. Transfers out, transfers are from funds from one fund to another fund, so we have to account for those. In this particular, this is transfers out from the general fund. So total operating expenses is 54.1 million. That leaves the surplus a little over $200,000. This is the five year projection with the 2027 proposed budget. As you can see, 2027, we have the $251,000 surplus. If you go down further and looking at ending cash, subtotal cash reserves and excess reserves, you'll see at the end of 2031, we have a projected ending cash balance of 20.4 million. We need cash reserves of 15.2 million, which gives us 5.3 million in excess. This is assuming no property tax increase. This is assuming no additional FTEs. Some of this stuff you have seen before, I think it's still important to show. So 2016, general fund expenses by department, you can see the police was at 10.6 million, fire and ambulance, 7.6 million, so on and so forth. In 2025, police was 16.6 million. So that's a $6 million increase, 13.4 million for fire and ambulance, a sizable increase there, and also a sizable increase for parks and rec at 4.6. Our salaries are our highest expense item, and this is the item that we really need to watch going forward. So as you can see here in the graph, the blue line is police salaries, and the orange line is the fire and ambulance salaries. Our revenue growth has slowed. Historically, the city's financial projections assume stronger revenue growth. Earlier projections always had 3% revenue growth, 3% operating, 5% personnel growth. The most recent projection is considerably more conservative, one and a half revenue growth, 2% operating growth, and a 4% personnel growth. The city's revenue environment has changed. We should budget based on revenue environment we are experiencing, not the revenue growth we hope will occur. sales tax remains one of the city's most important general fund revenue sources 25 and 26 sales tax information and predictions show approximately a two percent growth compared with the prior year however the monthly results are uneven some months are experiencing positive growth other months are flat or declining several months are showing year-over-year decreases This volatility makes it increasingly difficult to rely on sales tax growth to absorb permanent increases in personnel and operating costs. This slide here shows our sales tax collections in the last six years. from 2021 to 2026. And you can see that we are at a 2% growth over last year. This sales tax number, the 16.7 million is only general fund sales tax collected. It does not include the 2004 and 2018 sales tax. We account for those differently since those go to certain projects. So underneath that you have the 2004 sales tax and the 18 sales tax, which is additionally another $10 million. The cost of providing services has changed. The city is not buying the same services at the same price it did several years ago. Examples include labor, our collective bargaining agreements, non-union employee compensation, competition for qualified employees, and recruitment and retention. Materials and supplies, construction materials, vehicle and equipment parts, technology, fuel, utilities, contracted services, they're all going up. Capital and infrastructure, higher construction costs, higher engineering costs, higher equipment costs, increased costs of maintaining aging infrastructure. We need to recognize these costs when determining how much revenue is necessary to maintain current services. Fiscal year 2027 compensation increases were as follows. Bargaining union employees were 5%, non-union employees at 4%. Personnel services are approximately 43.6 million in the 27 projection. Personnel costs represent the largest component of the general fund's operating expenditures. Even relatively modest annual compensation increases compound over time. So we currently are just going into a structural problem. Our revenue growth at one and a half to two and a half versus personnel cost growth of four to five, operating cost inflation of 2% plus. So when these expenditures grow faster in revenues, we're gonna have a revenue gap, we're gonna have reserve usage, and we will not have financial flexibility. We can manage a one-year imbalance. We cannot responsibly make structural spending commitments that require reserves every year. Property tax, maintaining a stable tax ask. The city has maintained a consistent property tax ask in recent years, while the community's property tax valuation has continued to grow. For fiscal year 27, the recommendation is to maintain the property tax ask at the same level as the prior year, rather than capture additional valuation growth. Maintaining the existing property tax ask requires equally disciplined approach to expenditures, particularly personnel costs, which represent the largest component of the general fund budget, as I've stated before. For 2027 and beyond, some items that the city should do Pause the addition of new personnel unless a position is necessary to address a critical public safety regulatory or operational need. Evaluate vacancies before automatically refilling positions to determine whether the position remains necessary or whether duties can be reorganized. Develop a strategic hiring process They evaluate staffing requests based on service levels, workload, organizational priorities, financial sustainability, and measurable need. Prioritize existing employees and essential services before creating additional recurring personnel obligations. Key message, key takeaway, holding the property tax ask steady must be accompanied by disciplined personnel management. The city should move away from incremental hiring and toward a strategic workforce plan that aligns staffing levels with council priorities, service demands, and the city's long term financial capacity. This graph depicts the property tax valuation as compared to the mill levy. The blue line is the mill levy, and you can see how that has decreased basically since 2018-19. You can also see the orange columns are the valuation that has gone up. In 2017, our valuation for the city was a little under three billion. It is now currently at 5.3 billion. On this graph here, we're showing valuation as compared to our tax ask. The green line is the tax ask that we've had and it's been flat. If revenues continue to grow more slowly than expenditures, the city will have three choices. Reduced services. Examples include reduced staffing, reduced hour service levels, delayed maintenance, fewer programs, slower response times, and deferred equipment replacement. We can increase other revenues. That would include fees, charges for services. Sales tax, maintain the half-cent sales tax passed in 2018. Other dedicated revenue sources. And the other one is use reserves. This provides a short-term solution, but it's not sustainable for recurring operating costs. The concern is not whether we can balance fiscal year 2027. The concern is whether we can sustainably balance 28, 29, and beyond. FTE requests were identified this year. Public safety. We had a police lieutenant, two police officers, police office manager reclass, a police administrative support, firefighter EMT, maintenance workers at parks and rec, reclass and library and adding one, and a legal intern for a city attorney's office. There was also FTE requests for our enterprise funds. Departments continue to identify legitimate service and staffing needs as workloads, service expectation, and operational demands change. However, the general fund has limited capacity to absorb the additional recurring personnel costs, particularly when personnel costs are growing faster than recurring revenues. The issue is not whether the individual requests have merits. The issue is determining which positions represent the city's highest priorities and can be sustained financially over time. For 2027, recommendation is continued to maintain the property tax ask at the prior level, prior year level. Our doing so requires the city to carefully manage the growth of recurring expenditures, particularly personnel costs. Our approach should be pause the addition of new personnel, except where critical operational public safety or regulatory need is demonstrated. Review vacancies. Develop that strategic hiring process, prioritize. Consider whether some of these needs can be addressed through reorganization, technology, process improvements, or reassignment of existing resources. We need to ensure that new positions are sustainable using recurring funding source. Key takeaways, maintaining the property tax ask demonstrates our commitment to the taxpayers. In return, the city must demonstrate the same discipline on the expenditure side of ensuring that every position is necessary, strategically aligned, and financially sustainable. The goal should be to move from reactive budgeting to strategic financial management. As city administrator, I recommend that the city council maintain the property tax ask for fiscal year 27 as it was in fiscal 26. Recognize the general fund revenue growth is slowing. Recognize that personnel and operating costs are increasing faster than recurring revenues. Continue to prioritize essential services when considering new FTE requests. Continue efforts to identify operational efficiencies and savings. Establish a goal of reducing reliance on reserves for recurring operating expenditures. The question before us is not whether Grand Island can balance the fiscal year 2027 budget. We have. The question is whether the way we balance it today creates a sustainable financial position for tomorrow. Our responsibility is not simply to balance one budget. Our responsibility is to ensure Grand Island remains financially strong enough to serve its citizens for years to come. Thank you.

Public hearing is now open. Is there anyone that would like to speak on this item? Come on up and state your name.

Thank you, Mayor, Council. Gerald Pools. And I just want to, in looking at the budget, we know we have the personnel costs rising. In reviewing last year's budget or expenditures, you spent, well, there's like about $4 million for the AstroTurf, a project that could have been postponed for two years, three years. The same with Island Oasis could have been postponed. All these were elective issues, and you crammed it all into one budget. And there was talk of buying a $20 or $25 million bond to finance some of it. And there was no consideration for the interest that is going to have to be paid on these bonds. So yeah, you got your work cut out for you, because you're going to have to stop spending. You're going to have to show the discipline. that if you were a business, you talk about being a business, we're a business, but yet you spend money like it's going out of style. Of course, last year you did. You had the transfer station, Island Oasis, the train at Sully Park, and the Ryder Park thing. This is, it's not sustainable. And if you don't do something now, I know we're going to have property tax ask will go up in the years to come. The state is having problems with their budget. They're going to cut state aid somewhere to this city. And for, after this last year of watching you people throw money away, I think, yeah, you got some work to do at maintaining, getting some fiscal discipline going. So, thank you.

Is there anyone else that would like to speak on this item? If not, public hearing is now closed.

6B, public hearing on fiscal year 2026 to 2027, general property and community redevelopment authority tax request. Mr. Brown.

Thank you, Mayor, Council. This is for the property tax ask that we just discussed in the budget. The increase from the 26 valuation from the 25 evaluation was $304,336,184, or 6%. If we apply the current mill levy of 0.241485 to the new valuation, that would increase property tax of $605,483 over the prior year. The city and CRA tax ask for fiscal year 27, or for 26, is $13,007,831. If the city applies a 2526 property ask of $12,207,540 to the new valuation, there would be no tax increase. Mill levy would decrease to .227797. CA property tax ask is $798,890. same as the prior year. CRA mill levy would decrease from 0.015805 to 0.014908. Thank you.

Public hearing is now open. Is there anyone that would like to speak on this item? If not, public hearing is now closed.

6C, public hearing on fiscal year 2026 to 2027, parking district number two, the ramp, Tax request. Mr. Brown.

Thank you, Mayor. The 2026 valuation for the downtown improvement district, the parking ramp, which across the street that way, I guess, increased from the 2025 valuation by 5.5 million or 5.9%. Downtown Approval District Number 2 ramp is not requesting a property tax increase, therefore decreasing the middle levy from .009711 to 0.009710. So the property tax asked for the fiscal year 27 is $9,090. Thank you.

Public hearing is now open. Is there anyone that would like to speak on this item? If not, public hearing is now closed.

This meeting is now concluded.