2026 Budget

Fiscal Year 2026 All Funds Budget

Funds Beginning Balance Estimated Revenues Estimated Expenses Ending balance
General Fund $22,760,145 $16,110,264 $15,258,928 $23,611,481
Special Revenue Funds $20,801,688 $8,234,398 $9,900,829 $19,135,257
Debt Service Funds $6,607,156 $6,092,966 $5,988,672 $6,711,450
Capital Projects Funds $4,619,94 $3,830,940 $4,435,200 $4,015,684
Fiduciary Funds $1,281,72 $321,500 $308,800 $1,294,428
Total Budget $56,070,661 $34,590,068 $35,892,429 $54,768,300

Revenue Estimates

  • Earnings Tax estimate of $13,525,200 is a very conservative 2% increase over FY 2025. Year over year, earnings tax averages an almost 4% increase.
  • We have estimated the 2026 Property tax collections to increase 1% over 2025 collections. In 2024, collections averaged 20% higher with the revaluation of property in 2023.
  • All other revenue sources to remain relatively flat over the next five years.

Expenditure Assumptions

  • Personnel estimates are in line with current union agreements and include a 3.75% COLA in FY 2026. Any savings in 2025 are a direct result of vacancies.
  • The 2026 Non-personnel line items such as contractual services, materials and supplies for the General Fund have increased an average of 4% from 2025.

General Fund Budget

City of Montgomery General Fund Budget Summary - Fiscal Year 2026
Projected Beginning Balance $22,760,145
Estimated Revenues and Transfers In $16,110,264
Estimated Revenues and Transfers Out $15,258,928
Positive Variance $851,336
Projected Ending Balance $23,611,481
6 Month Reserve Policy $7,629,464
Unreserved Fund Balance $15,982,017

General Fund Budget

  • FY 2026 General Fund Revenues are very slightly lower, less than half a percent, than the 2025 anticipated revenues due to conservative estimates.
  • The earnings tax projection to includes a conservative 2% increase overall. Earnings tax is currently distributed 75% to the General Fund, 20% to the Capital Improvements Fund and 5% to the Bond Retirement Fund.
  • The budget includes staffing all positions at 100% of cost so any vacancies will generate budget savings while the position is recruited and ultimately filled, unless overtime is needed. These savings are trued up following the subsequent year budget meeting at the end of the year. The purpose of this is to reduce variances.

Capital Projects Funds Budget

City Pool

  • FY 2026 includes the addition of a water feature at the City pool.

General Government

  • Fleet management program includes expenditure of $450,000.

Street Maintenance and Repair

  • Annual Street Resurfacing on Village Green Drive, Golf Green Drive and Carriage Lane

Fund Balance Policy

City of Montgomery General Fund Budget Summary - Fiscal Year 2026
Projected Beginning Balance $22,760,145
Estimated Revenues and Transfers In $16,110,26
Estimated Revenues and Transfers Out $15,258,928
Positive Variance $851,336
Projected Ending Balance $23,611,481
6 Month Reserve Policy $7,629,464
Unreserved Fund Balance $15,982,017

Fund Balance Policy Other Funds

  • General Fund (established target of six – twelve months of operating expenditures).
  • Capital Improvement Fund 410 - established target of $1,000,000.
  • Arts and Amenities Fund 485 (established at $376,237, equivalent to two substantial restricted bequests to the fund).
  • Fire/EMS Levy Fund 223 (established target of six – twelve months of operating expenditures).

 

Fund Description Policy Projected Balance 2027 Policy Met?
101 General Fund 6-12 months operating expenditures $24,704,800 Yes
Fund 223 Fire/EMS Levy 6-12 months operating expenditures $11,168,264 Yes
Fund 410 Capital Improvement $1,000,000 $1,093,388 Yes
Fund 485 Arts and Amenities Restricted bequests of $376,237 $633,964 Yes

Next Steps

  • First reading of the 2026 budget on October First reading of the 2026 budget on October 8.
  • Second reading of the 2026 budget on November 5.
  • Third reading and passage of the 2026 budget and passage on December 3.
  • Any final appropriation adjustments for FY 2025 for consideration on December 17.

Contact

Maura Gray

Finance Director
513-792-8349

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