City officials opened their first 2026 budget workshop this week, outlining a lean spending plan that keeps services steady but raises the property tax levy by 10% and hikes both water and sewer rates amid surging employee and infrastructure costs.
City Manager John Goodwin called the proposal a “maintenance budget,” noting that it includes no major new programs and few capital additions. “There’s not a lot of fluff in here,” he told council, crediting staff for preparing a balanced plan that protects core operations.
Salaries, benefits drive costs
Expenditures are projected to rise just over 4% to $22.46 million, but 88% of that increase stems from salaries and benefits. Retirement system contributions jumped between 12% and 18%, while medical premiums climbed more than 15% for active employees and 21% for retirees.
The general fund would use $844,000 from reserves and a $741,000 tax levy increase to close a $1.58 million gap. The 10% levy hike brings the total property tax levy to $8.1 million, increasing the city tax rate to $6.99 per $1,000 of assessed value — about $159 more for a home valued at $275,800.
New revenue and shared services
Sales tax growth and non-property tax revenue help offset steeper cuts. Sales tax is expected to rise 3.8%, adding roughly $226,000. The city’s shared services agreement with the Town of Canandaigua will grow by about $360,000 to $1.46 million.
A new revenue stream from adult-use cannabis sales is projected to add $100,000 once county distribution begins. “We think we can count on that money,” Goodwin said, citing discussions with Ontario County and local dispensaries.
Water and sewer rates to rise
Water customers would see a 10.9% increase, taking the minimum quarterly bill from $64 to $71. Goodwin said the increase is needed to stabilize the fund after operating losses. The average annual bill for residents would rise about $28, to $284 — still “roughly half” the national average, he noted.
The sewer rate will rise 13.9% to address higher electricity and chemical costs at the wastewater treatment plant. More significantly, the city faces an estimated $55 million in mandated upgrades by 2029 due to new state effluent standards — roughly double previous projections. Goodwin warned that Canandaigua will likely “go into violation” to become eligible for state grants covering much of the cost.
Capital constraints and deferred projects
The city will maintain its capital reserve contribution of $2.8 million, but the fund balance is projected to end next year at just $163,000, prompting concern from council members. “That’s not a lot of money,” one said.
To balance the budget, officials cut or delayed multiple projects, including resurfacing the Sonnenberg pickleball courts, rebuilding the Baker Park lot, installing new city pier restrooms, and a 2028 street reconstruction program. Equipment replacements for police, fire, and DPW were reduced or staggered.
Public safety and staffing
The fire department will maintain its 20-member roster, with no funding for a deputy chief. Instead, the budget adds grant-writing funds to pursue a federal SAFER grant for future staffing. Police operations include the replacement of two marked patrol cars and continued school resource officer funding, now under a 60/40 cost share with the school district.
Overall staffing levels decline by 2.4 full-time equivalents, with unfilled positions in finance and seasonal parks roles.
Long-term pressures and outlook
Goodwin acknowledged deep challenges in maintaining infrastructure and balancing fiscal prudence. “It’s a scary proposition,” he said of the wastewater mandate, adding that the city will seek to amend its agreement with Ontario County to share costs more equitably.
For residents, the combined increases in property tax, water, and sewer bills will total roughly $226 annually. Council members said they intend to keep discussing vehicle purchases, youth programming, and flood mitigation priorities before adopting a final plan later this month.
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