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Vienna is projected to finish fiscal year 2026 with a $450,000 general fund deficit as retirement payouts, overtime costs and unusually low staff vacancies strain the town’s budget.

Finance Director Steven Barlow presented the midyear forecast to the Vienna Town Council on Monday, Feb. 2. The town’s $34.7 million general fund covers the fiscal year ending June 30.

A major factor is the cost of paying unused time off to seven retiring employees with long tenures and high salaries. The town also faces increased overtime and on-call expenses tied to special events and emergencies.

In a typical year, Vienna saves about $1.2 million through vacant positions, which can offset retirement payments, Barlow said. With more jobs filled this year, those savings have not materialized.

“It’s a great thing operationally, it’s a great place to work, but from a budget perspective, it has an impact,” Barlow said.

Town revenue remains on track, and business license taxes due in March could reduce the projected shortfall if collections exceed expectations.

Vienna has already deferred vehicle replacements, stopped plans to use the previous fiscal year’s surplus and begun monitoring departments’ discretionary spending. Hiring for positions deemed nonessential has also been suspended through March 31.

Officials could extend that hiring freeze through June 30 and consider cuts to nonsalary departmental expenses if further action is needed.

No midyear effects are expected for the town’s debt service or water and sewer funds.

Barlow said the budget proposal for the next fiscal year will include a more realistic allocation for paid-time-off payouts based on this year’s higher costs, although the amount can vary annually.

The Town Council is scheduled to receive the proposed budget March 4. Work sessions and public hearings will follow, with adoption planned for May 18.