STURGIS – The City of Sturgis is in the process of developing its 2027 budget, with a focus on balancing ongoing expenses with realistic revenue projections.

Mayor Rod Bradley and City Administrator Rhea Crane have spent the past several weeks working with department heads to review anticipated expenses, revenue projections and departmental needs as they develop the proposed budget for council consideration.

Bradley presented an overview of the budget at the City Council’s Monday, Sept. 21, meeting. The city has until the end of November to finalize its 2027 budget. The City Council will ultimately be responsible for establishing spending priorities and approving that final budget.

Bradley said the city began the process by using the current General Fund budget of approximately $10 million as a framework. From that amount, they identified about $300,000 in one-time expenses that are not expected to carry forward into 2027.

"The first step was identifying expenses that were specific to this year and taking those out so we could get a better picture of what our ongoing costs really are,” Bradley said.

At the same time, the city is accounting for increased expenses expected in 2027, including wages, utilities, dispatch services, auditing and information technology and cybersecurity.

Preliminary projections show those increases will exceed some of the savings created by removing one-time expenses. However, additional sales and property tax revenue could help offset a portion of that difference.

Bradley emphasized that the numbers remain preliminary and will continue to change as more information becomes available.

"This is a working budget," Bradley said. "We're still gathering information and making adjustments. The goal is to use realistic revenue projections and make sure the expenses we put into the budget reflect what we actually expect to spend."

One of the larger issues under review is the amount of revenue available from the city's enterprise funds. In the current budget, several hundred thousand dollars from those operations was used to help support the General Fund.

The city's initial review indicates that the same level of funding may not be available in 2027.

"We have to be careful about how much we rely on those funds," Bradley said. "We want to make sure the enterprise operations themselves remain financially sound while also looking at what they can reasonably contribute."

The city’s enterprise funds - water, wastewater, sanitation, ambulance and the liquor store - operate much like individual businesses within the city. Rather than relying primarily on general tax dollars, these services are funded largely through the fees and revenue they generate.

City officials are reviewing each enterprise operation individually as part of the budget process. Bradley said that review provides a clearer picture of revenues and expenses and will help determine what level of funding may be available for the General Fund next year.

Sales tax will also play an important role in the final budget. The city is still waiting for additional sales tax information that will provide a more complete picture of 2026 collections, including revenue associated with the Sturgis Motorcycle Rally.

"We don't want to build a budget around revenue we aren't confident we're going to receive," Bradley said. "As we get better information, we'll be able to refine those projections."

Bradley said the work ahead will focus on closing the remaining budget gap while maintaining essential city services and building a sustainable financial plan for 2027 and beyond.

"Finding that balance is our goal," Bradley said. "There is still work to do, but we're getting a much clearer picture of where we are and what decisions will need to be made."