As we work through West Fargo’s preliminary 2027 budget, I’m pleased with where we are. The budget is in a solid position, it is fiscally conservative, and I believe we’ve taken several important steps toward making our budgeting process more sustainable and predictable.

Here are a few updates worth highlighting.

Putting City Hall Rent Where It Belongs

One change I strongly support is moving the cost of our City Hall rent into the annual operating budget.

In previous years, the city chose to pay this expense from our reserve fund. While that kept the expense out of the annual budget, City Hall rent isn’t an unexpected or one-time expense. It is a known, recurring cost.

If we know we’re going to spend the money every year, I believe it should be reflected in the budget every year.

Including the rent in our operating budget provides a more accurate picture of what it actually costs to operate the city and protects our reserves for the purposes they are intended to serve.

Very Limited New Hiring

Personnel is one of the largest ongoing expenses for any city, and every new position we add creates a financial commitment that extends well beyond a single budget year.

For 2027, we’ve been very disciplined about adding staff.

The preliminary budget includes just one new position, in our finance area.

As West Fargo continues to grow, there will always be requests and legitimate needs for additional employees. But particularly in an environment where revenue growth is constrained, we need to be thoughtful about adding permanent expenses.

A 2.5% Cost of Living Adjustment

We’ve also reduced the proposed cost of living adjustment, or COLA, for city employees to 2.5% in the preliminary budget. It’s worth noting that most employees also get a ‘step’ in their compensation in the ballpark of 4% - 5%.

Our compensation and benefits are something we need to evaluate closely before we form the 2028 budget…the costs seem unsustainable. That said, our employees are critical to providing the services residents depend on every day, and maintaining a strong workforce remains important. Finding the right balance will be important over the next year.

Planning Ahead for Equipment

Perhaps the change I’m most excited about is the creation of a dedicated equipment fund.

Cities require some very expensive equipment. Fire trucks, snowplows, garbage trucks, and other major pieces of equipment can cost hundreds of thousands of dollars, and in some cases significantly more.

The challenge is that we don’t purchase those items every year.

Historically, that has contributed to significant ups and downs in our annual budgets. One year might have relatively modest equipment needs, while another could include several major purchases.

With the new 3% property tax increase limit, that approach becomes increasingly difficult to manage.

The equipment fund allows us to plan ahead. Instead of waiting until a fire truck or snowplow needs to be replaced and absorbing the entire expense in a single year, we can begin setting aside money annually for equipment we know we will eventually need.

Think of it like saving for your next vehicle before your current one needs to be replaced.

This should help smooth out future budgets, make our expenses more predictable, and reduce the likelihood that a major equipment purchase creates a sudden financial challenge.

Where We Go From Here

This is still a preliminary budget.

There is additional work to do, and spending can still be reduced before the final budget is adopted. What cannot happen from this point forward is an increase in the proposed tax rate.

That distinction is important. The preliminary budget establishes the ceiling, not necessarily the final number.

I believe the 2027 budget puts West Fargo in a solid position while also introducing some important changes to how we plan for the future. Moving recurring expenses into the operating budget, limiting new hiring, taking a measured approach to compensation, and planning ahead for major equipment purchases are all steps toward a more disciplined and predictable budgeting process.

Most importantly, the process isn’t finished yet.

West Fargo will hold a public meeting on the 2027 budget on Tuesday, September 8, 2026. I encourage residents to attend, learn more about the budget, ask questions, and share their feedback.

A city budget is ultimately a reflection of priorities. The more our community understands and participates in that process, the better those decisions can be.