STURGIS – The Sturgis City Council took a first step in positioning the community for a secure financial future when it approved first reading of the 2027 budget at its Oct. 19, meeting.

The discussion considered options for closing a budget shortfall while building a stronger financial foundation. Those options included reducing expenses, adjusting some service fees and determining how much money the city should keep in reserve.

“This budget provides a roadmap for the city’s financial future, helping us maintain essential services and plan for improvements that will benefit our community for years to come,” Mayor Rod Bradley told the council.

The 2027 General Fund budget includes approximately $10.38 million in expenses. That fund provides for everyday city services, including police, fire, streets, parks and the library.

City officials used the 2026 budget as a starting point and removed more than $300,000 in one-time expenses. The 2027 proposal also accounted for wage increases established through the city’s labor agreement and an anticipated 35% increase in Black Hills Energy bills.

Projected General Fund revenue totaled approximately $9.35 million, leaving an initial shortfall of about $1.03 million between 2027 revenue and expenses. Available money from city operations funded through fees, along with the special sales tax fund known as the BBB fund, reduced the projected remaining deficit to $593,647.

To address that shortfall, $400,251 in potential additional revenue and $331,527 in possible expense reductions were identified for 2027. Together, those options could close the shortfall and leave a projected surplus of $138,131.

Revenue options presented for consideration included adjustments to Community Center fees (which have not been adjusted for several years), airport leases and maintenance fees (which would more reflect market pricing), commercial dumping fees at the Rubble Site, bulk water prices and ambulance service fees (comparable to surrounding communities). Other possibilities included park shelter usage fees (to help cover staff costs) and reimbursement for part-time library programming.

Potential savings included leaving some vacant positions unfilled, reducing insurance costs and adjusting ambulance staffing and schedules.

The budget process also raised longer-term questions about making the General Fund less dependent on revenue from the annual Sturgis Motorcycle Rally, and transfers from other city funds, while ensuring those funds could cover their own expenses and future needs.

Strong financial planning and direction, and setting reserve goals will help the city provide for residents’ needs, keep essential services dependable when unexpected costs arise and plan improvements that make Sturgis a better place to call home.

Approval of first reading moves the proposed budget forward. A second reading and final adoption are scheduled for the Nov. 2, City Council meeting.