Fredonia’s budget talks got underway Wednesday with plenty of grim news.

Village Treasurer Erlyssa LeBeau continually provided gloomy financial figures as trustees debated how to keep the troubled village solvent. The trustees are considering Mayor Michael Ferguson’s budget proposal for 2026-27.

The proposal includes a 2% tax increase — not good news for residents, but a far cry from the 54% hike slapped on them for 2025-26.

LeBeau projects $9.4 million in expenses for the village next year. However, “we really have to watch our spending to make sure we don’t get to that $9.4 million.”

Soaring electricity bills have bloated the expense lines — LeBeau stated that costs have risen from 30 to 40% over the last year.

The treasurer continued that she anticipates a negative $330,000 fund balance going into the next fiscal year. “We can sign a contract and have them log (the reservoir property). That would be $140,000,” commented Trustee Jon Espersen.

“It’s possible, the way our revenue is going … I think we’ll be OK,” LeBeau said. “But I have been watching everything (village employees are) spending. If they can push it off, I’m asking them to wait.”

Trustee Paul Wandel noted a recent $130,000 project that repaired grit pumps at the wastewater treatment plant. “We’re forced into some of these mission-critical repairs that we have to do, but it’s really taking big chunks out of our budget,” he said.

LeBeau went on to say that the village’s water fund balance is only $25,000, though the sewer fund balance is “healthy.” Espersen commented, “It was the water chlorination project that destroyed the fund balance.

Trustee LeeAnn Lazarony worried that there is no money for water infrastructure repairs. “One … three-day thing could bankrupt us. I’m serious. That’s my concern, how do we balance it out so that we are sure we still have some backup, instead of having to borrow?

Ferguson said, “We’re open to listening to any ideas.”

The meeting meandered into mumblings about municipal consolidation and the village water system. “My conversation was more about how we really need to start thinking about reserve funds for water, sewer, power,” Lazarony said.

“It’s going to be three years before we get this (North County Water District connection) project done. If we have something catastrophic happen at the water or sewage treatment plant, or the lines blow up in the village, we need to start preparing to have some money.”

“The only way to do that is to raise rates,” Espersen said.

“I don’t want to do that,” Lazarony said. “I’m just saying, we need to start thinking about how we can control it, as much as we can control it.”

She soon added, “Even after the water project is completed, we still have lines that are from the 1800s. We are still going to need reserve funds to take care of that”

LeBeau chimed in that the village is supposed to have a policy where 15 to 20% of expenses should go toward fund reserves. “At the end of next year, our general fund and our water fund, according to what we have now, will not be in that (range),” she said. The general fund will be $1.2 million short of that goal, and the water fund about $320,000 short, she said.

Ferguson complained about previous village leaders.

“What various administrations are handed is things that weren’t done in previous administrations,” he griped. “Everybody was, ‘Well, we can’t give anything to the next administration, because that’s their administration’… We’re supposed to be building a map so that whether I’m here or someone else is here or you guys are here, they’re picking up the ball and running with it.”

The mayor added: “There’s no vision of where we’re going to be, which is why we are where we are at now.”

The conversation turned to water rates when Trustee Ben Brauchler commented, “Last year, I thought we did not raise the water rate enough. I can see another buck on that. I hate to do it, but at the same time, it might be something where we really want to consider to rebuild that balance in there — which we used for an important purpose, we used it to replace that chlorinator. The chlorination system’s behind the root of several of the recent boil orders, so we did good.”

Lazarony suggested raising the village’s $30 base user fee rather than its rate per thousand gallons used. That would offer a more predictable flow of increased revenue, she said.

Espersen warned her that could create the “visual” where Fredonia is going to raise their water prices so that when they switch over to the North County Water District, it will look like saving money to village residents.