9/15/2026 Presentation of the 2027 Mayor's Recommended Budget

2027 Mayor’s Recommended Budget City of Franklin, Wisconsin Common Council Presentation • September 15, 2026 Responsible today. Sustainable tomorrow. MAYOR’S RECOMMENDED BUDGET • SEPTEMBER 15, 2026 The 2027 Budget in One Sentence The financial story before the spreadsheets EXECUTIVE SUMMARY Franklin is growing, but the cost of providing municipal services is growing faster than the recurring revenue available to fund them. Protect essential services Police, Fire/EMS, streets, public works, elections, inspections, planning, health, library and core administration. Preserve financial flexibility Maintain reserves, manage debt prudently, and avoid using one- time money for ongoing obligations. Plan beyond one year Use the 2027 budget to position Franklin for capital, workforce and revenue decisions that extend beyond 2027. The recommended budget is intended to balance service continuity, affordability, and long-term fiscal sustainability. CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 2 Budget Built on Clear Principles The same discipline, sharpened for 2027 FRAMEWORK Essential services first Maintain reliable core municipal services. People are the service Recognize that municipal service delivery is labor- intensive. Ongoing pays for ongoing Match recurring expenditures with recurring revenues. Capital is planned Prioritize lifecycle needs instead of reacting to failures. Debt is a tool, not a solution Borrow for long-lived assets within conservative limits. Taxpayer impact matters Evaluate choices through both service and affordability lenses. CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 3 Your Property Tax Bill Is Bigger Than City Government The City receives only one portion of the total property tax bill TAXPAYER CONTEXT CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 4 ≈24¢ OF EACH PROPERTY- TAX DOLLAR supports City of Franklin services The City receives only one portion of the total property-tax bill. ≈24¢ is an approximate share; actual distribution varies by property and applicable taxing jurisdictions. What Does the City’s Share Buy? The municipal portion of the tax bill supports services residents use every day TAXPAYER CONTEXT Public resources WHAT THE CITY’S SHARE BUYS PUBLIC SAFETY ROADS + SNOW REMOVAL PARKS + PUBLIC WORKS LIBRARY + HEALTH ELECTIONS + PLANNING ADMINISTRATION + SUPPORT The challenge is balancing the services residents expect with the resources available to provide them. Franklin in Milwaukee County Context Franklin’s levy growth has remained modest over the most recent completed comparative period TAXPAYER CONTEXT 18.6% CITY OF FRANKLIN 24.6% FRANKLIN SCHOOLS 38.1% OAK CREEK- FRANKLIN 36.4% WHITNALL 33.5% MMSD 16.9% MILWAUKEE COUNTY 14.8% MATC 2016–2025 CUMULATIVE LEVY GROWTH Franklin’s municipal levy growth remained modest compared with several major overlapping taxing jurisdictions. Source: City of Franklin Finance Department, 2025 Tax Facts. Same Service Cart. Higher Price. Franklin must continue purchasing the inputs required to deliver municipal services COST PRESSURES When recurring revenue grows more slowly than the cost of the same service cart, the City eventually has to change the cart, the service level, or the revenue supporting it. SAME CART. HIGHER PRICE. Wages • Insurance • Fuel • Salt • Utilities • Vehicles • Technology • Construction • Contracts Higher costs do not necessarily mean more services. Sometimes it simply costs more to provide the same services. The Core Wisconsin Municipal Finance Challenge Growth in community value does not automatically translate into equal growth in operating revenue REVENUE CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 8 0.782% NET NEW CONSTRUCTION Levy capacity is constrained. Service costs are market-driven. The difference compounds. Franklin’s challenge is whether recurring municipal revenues can keep pace with the recurring cost of today’s services. 2027 General Fund Snapshot The Mayor’s Recommended Budget now reflects the completed General Fund revenue and expenditure schedules GENERAL FUND CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 9 $33.96M GENERAL FUND REVENUE $33.89M GENERAL FUND EXPENDITURES $22.31M GENERAL FUND LEVY $25.22M TOTAL CITY LEVY 0.782% NET NEW CONSTRUCTION 227.31 AUTHORIZED FTE Where General Fund Revenue Comes From Recurring revenue capacity determines recurring service capacity GENERAL FUND CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 10 74.3% PROPERTY TAX SHARE OF GENERAL FUND REVENUE $1.395M Shared Revenue $1.90M Ambulance / EMS $1.23M Permits $950K Water Utility Tax Equivalent $620K Interest $550K Landfill to General Fund Recurring revenue capacity determines recurring service capacity. Where the General Fund Goes Municipal services are delivered primarily by people GENERAL FUND CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 11 $26.31M PERSONNEL $20.76M PUBLIC SAFETY PERSONNEL $7.58M NON-PERSONNEL OPERATING Municipal services are delivered primarily by people. At a certain point, expenditure reductions become decisions about service capacity, staffing, maintenance or planned investment. The Structural Gap Is the Decision Point A recurring imbalance cannot be solved permanently with one-time actions CHALLENGE CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 12 RECURRING PROBLEM → RECURRING SOLUTION COST CONTROL Service Redesign Contract Review CAPACITY Staffing Choices Modernization REVENUE Fees • Aid Sustainable Sources Fund balance can provide timing flexibility. It cannot permanently finance an ongoing operating imbalance. What Franklin Is Already Doing The 2027 budget is part of a broader management response MANAGEMENT Organizational review Evaluate staffing models, responsibilities and service delivery across departments. Contract discipline Strengthen administrative and financial review of contracts and recurring commitments. Capital prioritization Separate urgent lifecycle needs from desirable projects and phase investment. Fee review Modernize fees and cost recovery where appropriate and legally permissible. Grant strategy Pursue outside funding while accounting for match and ongoing-cost obligations. Performance management Improve project tracking, accountability, financial controls and management information. CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 13 The Workforce Is a Financial Strategy Service quality, recruitment, retention and compensation are linked WORKFORCE City services do not exist independently of the employees who deliver them. Competitive compensation Competitive compensation, benefits and organizational capacity affect recruitment, retention and continuity of service. Recruitment & retention Vacancies and turnover create service disruption, overtime, training costs and institutional knowledge loss. Lean staffing Franklin must distinguish efficiency from understaffing and align positions with actual service expectations. 2027 Objective: Maintain a compensation structure that is fiscally responsible, internally coherent, and capable of supporting the workforce the City requires. CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 14 Capital: Plan the Cost Before the Failure Roads, facilities, fleet and equipment are multi-year obligations CAPITAL CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 15 $36.66M DEPARTMENT REQUESTS ↓ $26.22M MAYOR RECOMMENDED $10.45M LESS | 28.5% BELOW REQUESTS Lifecycle Management Reduces Budget Volatility A disciplined replacement cycle turns emergencies into planned decisions CAPITAL 1 PLAN Condition + useful life 2 PRIORITIZE Risk + service impact 3 FUND Cash + debt + grants 4 REPLACE Before failure 5 RESET Next lifecycle The goal is not to eliminate capital spending. It is to make capital spending predictable, prioritized, and financially sustainable. CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 16 Debt: Use Capacity Deliberately Franklin maintains both statutory and self-imposed debt constraints DEBT 5% Legal limit Wisconsin law limits general obligation debt to 5% of equalized value. < State Cap City policy Franklin applies more conservative internal debt-management standards than the State maximum. $33.89M 2027 borrowing Recommended borrowing should be tied to long-lived assets and evaluated against future levy capacity. Debt is appropriate when: • The asset benefits multiple years of taxpayers • The project is necessary and cannot reasonably be cash-funded • Repayment fits within long-range financial capacity • The borrowing preserves rather than consumes future flexibility CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 17 TIDs: Growth Today, Revenue Opportunity Later Tax increment supports eligible district costs during the TID's life TIF / TID CREATE → INVEST → GROW → CLOSE → TAX BASE RETURNS Future TID closures can expand the tax base available to the overlapping taxing jurisdictions, including the City. Near-term focus Monitor TID performance, obligations, development timing, and debt exposure. Long-term opportunity TID #5 is currently anticipated to be the next significant closure opportunity, subject to final financial conditions and obligations. CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 18 2027 Opportunities Where Franklin can strengthen its long-term position OUTLOOK Continued development and long-term tax-base growth Future TID closures and return of increment to the tax base Capital prioritization and lifecycle management Strategic, disciplined use of debt Grants and intergovernmental partnerships Fee and cost-recovery modernization Process modernization and performance management Technology and cybersecurity investment Organizational and service-delivery innovation CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 19 2027 Threats Risks that require deliberate management rather than short-term reaction OUTLOOK Wisconsin municipal revenue constraints Structural operating imbalance Personnel, benefits, recruitment and retention pressures Infrastructure and deferred maintenance Debt capacity and taxpayer impact Inflation and market volatility Expiring, declining or uncertain revenues Development timing and TID performance Technology and cybersecurity exposure Grant match and continuing obligations State and federal policy changes Economic or emergency risks CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 20 The Choices Are Interconnected Every balancing action has a service, financial, or future-year consequence DECISIONS CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 21 1 PUT SOMETHING BACK 2 FIND A BETTER WAY TO BUY IT 3 INCREASE THE GROCERY BUDGET The goal is not to avoid difficult choices. It is to make them deliberately. Mayor’s Recommended 2027 Budget A balanced recommendation with a multi-year view RECOMMENDATION CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 22 $25.22M TOTAL CITY LEVY $22.31M GF • $1.50M LIBRARY $1.415M DEBT • $0 CAPITAL LEVY ESSENTIAL SERVICES | maintained CAPITAL | prioritized DEBT | used strategically RESERVES | preserved MANAGEMENT | reforms continue A balanced recommendation with a multi-year view. From Recommendation to Adoption The next phase is review, refinement, public notice and Council action PROCESS 1 Mayor’s Recommended Budget September 15 2 Finance Committee Review September 16 to October 9 3 Committee / Council Refinement October 20 4 Public Hearing & Notice October 28 5 Common Council Adoption November 17 CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET 23 Responsible Today. Sustainable Tomorrow. The 2027 Mayor’s Recommended Budget is designed to preserve the services Franklin relies on today while protecting the City’s ability to meet tomorrow’s obligations. Questions & Council Discussion CITY OF FRANKLIN • 2027 MAYOR'S RECOMMENDED BUDGET