Olive tte council adopts FY 2026 budget; finance director warns reserve policy triggered and manager to present correction plan

On June 24 the Olivette City Council adopted the fiscal year 2026 budget and approved a 10-year capital improvement plan, while city finance staff told the council the city's reserve policy had been triggered and a corrective plan would be required.

Director of Finance Darren Mann presented the FY 2026 budget and told the council the appropriation the body was adopting amounted to roughly $18.7 million. "We're actually approving that expenditure... roughly an $18,700,000 budget," Mann said. Mann outlined multi-year revenue and expenditure trends, noting a decline in general-fund sales-tax receipts after a major local enterprise left the city and a partial offset from higher investment income and new revenues associated with the 5 Oaks recreation facility.

Mann warned that the reserve policy — which the council set to require a general-fund balance equal to 50% of budgeted expenditures and to be maintained five years forward — will fall out of compliance under current projections. "The trigger was intentional," Mann said, explaining that the reserve-policy thresholds showed projected fund balances below the required level in five years. He said the policy requires the city manager to present a plan that corrects the imbalance within two years.

Mann and staff emphasized that the budget as presented included no planned reductions in full-time positions or changes to planned raises; however, they highlighted that personnel costs account for roughly three-quarters of the city's expenditures and that ongoing transfers from special-purpose funds (public-safety and fire operations transfers) create structural pressure on the general fund.

After public hearing and council discussion, the council voted to approve Bill 30 47 on second reading; the mayor announced, "The motion is passed. Bill 30 47 becomes ordinance 28 17." The council also adopted the capital improvement plan by resolution (Resolution 2025-260). Mann said the CIP contains about 75 line items over 10 years and that capital spending remains prioritized, including grant-funded street projects such as Olive and North Price Road improvements.

Mann said staff will present a corrective plan and further analysis to bring the reserve policy back into compliance and that council will consider any changes to revenue or expenditure assumptions during upcoming work sessions.