Vienna officials are expecting a year-end budget deficit as a result of rising retirement costs, overtime pressures and limited staff vacancies.
According to a mid-year budget update presented to the town council on Monday (Feb. 2), Town of Vienna Finance Director Steven Barlow outlined the $450,000 deficit anticipated in the $34.7 million general fund budget when fiscal year 2026 ends on June 30.
The projected deficit is due to under-budgeted paid-time-off payouts for seven long-tenured, high-salary employees who are retiring, as well as higher overtime and on-call demands for special events and emergencies, and low staff vacancy rates.
“On a normal year, you have $1.2 million in vacancy savings, which can cover these retirement payments,” Barlow said. “This year we don’t have that. It’s a great thing operationally, it’s a great place to work, but from a budget perspective, it has an impact.”
Barlow noted that the projected deficit is not due to revenues, which are on track with the town’s projections. Business license taxes due in March could chip away at the deficit if collections exceed projections.
“This is an opportunity where revenues could come in stronger from what we’re currently projecting,” Barlow said. “If that’s the case, this gap that we’re projecting could be significantly less.”
Barlow said town staff have already taken several mid-year actions to mitigate budgetary impacts, including deferring vehicle replacements, eliminating the use of the prior fiscal year’s surplus and monitoring departments’ discretionary spending.
The town has also suspended hiring for “non-essential” positions through March 31, but it could consider extending the freeze through June 30, Barlow said. It could also evaluate non-salaried departmental reductions if needed to fill the funding gap.
The town isn’t expecting mid-year impacts to the debt service and the water and sewer funds.
According to Barlow, funding allocated for PTO payouts in the next budget proposal will be closer to this year’s higher-than-expected cost.
“The plan, when we propose [the budget] to council in March, is to have a number for these PTO payouts that is closer to this, what we’re seeing this year,” said Barlow. “It could be lower, it could be higher year to year.”
The Vienna Town Council will receive the town budget proposal on March 4. Work sessions and public hearings will follow before the budget adoption on May 18.
