Planning, Programming & Zoning Commission - Regular Meeting

So work session for Monday, April 6th. It's 4 o'clock at our first uh discussion is on the 2027 budget by Bridget Wood, finance director. Oh motion the agenda. Oh, I'm sorry. And a roll call here. Okay, roll call, please. Mr. Schmidt, here. Mr. Marl, here. Miss Kon Smith here. Miss Barry, present. Mr. Salamanca here. Mr. Martin, here. And Mr. Simon approve the minutes. Two left. Agenda. Okay. Uh like the motion to um approve the agenda as proposed and approval of the minutes for March 16th, 2026 council work session as proposed. Second. Motion is second. All in favor?

I. All oppose. Same sign. Motion carried. Okay. Back to the beginning at four o'clock. Discussion on the FY2027 budget by Bridgetwood finance director. Miss Wood, please. Good afternoon. Um Bridget Wood, finance director.

Today we're going to be going over um the budget that's going to be published tomorrow in the paper. Uh as well as the levy rate that the mayor would like us to certify at, which will also be published um since it will be published in the paper, we have to note that we cannot increase or go over what is being published, but we can decrease. So the outline today would be to go over our levy rate and then to also go over um the budget itself. So for the levy rate um the mayor would like to see um keeping it that the people would pay less in property taxes for next fiscal year. Um the reason why that it is uh less is due to the roll back set by the state. Um so even if we kept our levy rate the same, our te our part of the property taxes goes down due to that roll back. Uh which I will explain in a slide that's coming up. Um, the roll back this year was set at $44 or not $44, 44.5345%. Which means that on a $100,000 house, only $44,535 of it is taxable. So this uh slide shows you the difference between what we had set out for the proposed levy um and the levy that we are planning to uh certify um and it's about a $222 change um between the two. So that first one breaks down the uh police and fire debt service and then all other services. So then the other services breakout um is shown on this

slide here. The that decreased about 41 cents. Um so then how is your uh tax bill determined on your home? Uh this again basing it off a $100,000 house. Um if you take it times the roll back, you get 44,535. That's taxable. Uh then you take that and divide it by a,000 because property taxes are per $1,000 of uh taxable value. Um and then you take it times the total tax levy rate. So that includes all taxing bodies within um the area. So, it could be county, um it could be the city, it could be college, um it could be the assessor's office, whoever makes up your um total taxing entities. So, for us, we're estimating at a net zero increase for any of the levy rates, which is not 100% true. I know that I believe the schools are planning on staying around the same rate and the county might be going up a little bit, but based on um just estimating or uh figuring that that would be the same, our part of the tax bill would go down about $63 a year. Again, showing the 6% decrease. All right. So, the next part is the budget that uh we would like to present to council and um on the 20th when we have our public hearing, this would be what would be adopted. Uh as long as nothing else changes. Um again, we can always decrease from this, but we cannot

increase any of it. Uh so from here we've got uh just a general overlook of the expenses and uh the increases or decreases on those which includes like salaries, retirements, uh grant funded expenses, liability insurance, um public safety, medical costs, uh some software and some other um expenses. Uh added a net decrease That's overall general fund. I will again uh reiterate this is just the general fund portion of the budget. It's not any other uh section. Uh the next slide here is for revenues. Um and this goes over areas that we were able to locate um increases that we could do. So building revenue, we were able to increase some police reimbursements. um clerk finance, we were able to uh increase some of our revenues that we receive in the roll back replacement. Um that is a continual decrease. Uh it will eventually be zero. Um the state's been working through decreasing that over the last number of years. Um we have an increase in the local option sales tax transfer that we will be able to use. Um this will be our first full year utilizing the full 20% um that we were graciously given to by our voters to decrease our levy rates or help with property tax relief. Um then we have a net decrease in use of employee uh benefits levy. So, that one there is actually going to um we're going to be using part of uh part of the cash reserves for the

employee benefits levy to help assist with um keeping that uh levy rate at the 2179. Um so with total revenue increases not including property taxes is about 1.8 8 million. Um, if you include the property taxes in there, our total revenue increase is about 2.2 or 2.3 cuz it's 2.28. Um, I'll go back one slide. The total for the expense increase um was 2.285 just like our revenue to make it a net zero. Um the here's some uh the property tax highlights. It goes over what the total amount of property taxes would be that would be coming in based on the uh $217979160 uh levy. The general fund levies uh include the uh consolidated general fund levy, the transit levy, uh the liability insurance levy, supporting emergency management uh commission levy, and the egg levy. Um those all totaled 561,000 over what we had collected this year. Um the employee benefits levy includes the police and fire retirement um FICA and diapers and um other employee benefits and that was a decrease from last year of approximately 1.1 million. Um and then the debt service levy is uh $1.7 million more than the than last year. Um some of that has to do with um increases in some different projects that we have going on for the city. And then we've

got we don't have our paybacks coming in yet from other sources for revenue. So once we get those in that'll start decreasing again. Uh so here is just a overall um summary of our general fund. Uh don't don't don't do not be surprised by the $4 million in fund use. U what that includes is ARPA um restricted projects uh budgeted use of the fund balance uh tiff revenues that we need to transfer in as well as the um transfer in for the employee benefits levy. Um the total for the uh use of fund balance is approximately $2.2 million um based on all of the current revenues and expenses that we have in our budget. Uh otherwise um ARPA makes up about a million dollars. That uh is an estimate of how much we will spend in ARPA between July and December. um we have to have it all spent by the end of u this coming December. So, we are planning to use most of it by the end of this fiscal year, but we want to make sure that we have something in the budget for next year for um in case we don't get it all spent before the end of June. Um so then the next slides here go over uh other budgets within the city budget. Um, we've got our capital projects funds. They, um, this is approximately $71 million worth of capital projects that the city will plans on doing in the next fiscal year. uh includes streets and bridges, traffic improvements, demolitions,

um our oops, sorry, our issuance for general obligations, some fiber uh backbone projects, parks, and the airport uh projects as well. Um the sewer fund, this has approximately um 31 million in planned revenue and expenses for fiscal 27. Uh it's an increase of 5.9 million, mostly based off of uh SRF projects that are going to be coming up. Um they've got a number of uh either lift stations or like improvements to lagoon uh that that will be going through uh the SRF pro process. Um, so that's why that looks like a huge increase. The storm water fund has approximately uh 7.8 in planned revenues and expenses for fiscal 27. Uh that's an increase of about uh $2 million. It's that increase is related to plan system improvements um for fiscal 27. Next one is the sanitation fund. Uh there's approximately 7.6 7.7 in planned uh revenues and expenses. That is an increase of a little over 145,000 over fiscal 26. Uh increases are mainly from uh personnel. All right. And then we got uh road use tax fund budget has approximately um 12.2 2 million in revenue and expenses for fiscal 27. Um it's an increase of a whole $17,000. Uh that's in combination of expected bridge expenses and then increased uh commodities as well.

Our local option um fund budget is next that has 22.1 million in planned revenues and expenses. Um it is an increase of about 1.3 over fiscal 26 and that has to do with the being able to use the full year of um property tax relief um to the general fund. our federal block grant funds. Um, this one is for our CDBG. Um, so our community development, they have about 8.5 in planned revenues and expenses and that's an actual a decrease of about 667,000 from fiscal 26. Uh, the decrease is from reductions in expected federal funding. And last but not least, we have our federal housing funds budget. Uh this would be for our housing authority. Um they have approximately 7.7 in plan revenues and expenses. Um that's a decrease of about 63,000 over the current fiscal year. Uh the decrease is mainly from less family health insurance. Um which is just employee benefits. Uh there had been some personnel changes over the last fiscal year. All right. Any questions?

Council questions. I know it's a lot of information to be u digesting right here. You know, our our goal is to uh my goal was to keep it at the levy rate at 2179 like it was uh last year. And uh I think we can do that. And I honestly believe that if we can show our citizens that our goal is to reduce the tax askings 6%. Including the the roll back, right?

Uh we've done our due diligence this year. And uh we will be starting and working on next year's budget right after this budget. So that we're not doing this in January, February, and March that we're going to do a deep dive in into next year's budget to see where where we can find areas of of savings. Um so that's where I'm at. I'm open it up to the floor for questions. Mr. Schmidt, so Britney, where um Bridget, I'm sorry. Um, where are we at with the grout in the library? Where's that? Um, so this budget fully funds the grout at 625,000. Um, the library is a department, so they there's no change.

There's no change. Okay. Um, so I know one of my council members favorite topics is the amount of money on my tax bill for Waterloo for this year versus next year. And let's use the $100,000 house just for discussion. Decrease. It should show a negative. Pardon me. It should show a negative. Right. So this year I'm paying that just came out. How much do you want? Um, so on a $100,000 house, you are at about a $1,34.

Okay. And if we certify at the current the same levy rate, you'd be paying uh $971 instead. It depends if we use the cash reserves appropriately. Um on page five, the you mentioned the uh uh decrease in roll back. So that's for the commercial that's been going on for several years. Commercial real estate roll back. Is that right? Um right. It's a commercial and industrial roll back. Yeah.

Um and then that also includes um it's called a tier one credit. It's for business property t or business what they call it business property tax credit. Um so if you have a business on a commercial or industrial property you get a like a discount or what like a credit on your taxes. Well not every business had been taking that credit. So the state implemented like anybody in that um in those types of uh land uses got this credit and um that's then the city gets part of that back like the state pays us for them taking that credit. Um but it that is decreasing too like it's not going to be something that's here all the time.

And I'm and I'm looking at page five. Yep. I'm getting there. Yeah. Yep. I think right and then the uh increased local option sales tax transfer at million4. So that is what was uh portrayed to the citizens to be used for uh property tax relief. Um and actually it's uh 2.6 million will be going into the general fund. Okay. In this slide you've got a million four. That was the increase from last year. Okay. But yes, we only funded we were only allowed to use half of

last year because of how it rolled in. So started in January this year. So Okay. And it's probably not a question for you. It's probably a question for the city engineer, but do you have any idea how they plan to deal with that in the street department or the street repair department as far as that loss? They've got a pretty healthy uh reserve or fund balance right now. So, I don't think they're going to be uh too impacted um at least for a couple of years. Oh, great. Kind of depends on what projects they have going on, too.

Plus, in our city engineers presentation on the local option sales tax when we when we opposed this, he he stated he needed $10 million a year to keep up the roads. And we were bringing in 10 million plus this. Yeah, we bring in about 13 million or so a year. in road tax. So, or local option, sorry. Um, so this is just the 20% off of that would be um less than he would get more than the 10 10 million that he had said. And our engineers estimates have been coming in pretty favorable on our project. So, we're even saving more money there. Correct.

Okay. And just a real simple question going back to page three where you've got uh your published certified levies, the debt service. If we have pick a department, but if we have excess funds, why would we not want to pay down our debt so as to lower the ongoing levy expense to the general budget? What do you mean? Um well, excess funds. Well, you just said the I mean, we just talked about the street department. you said had millions more than what they anticipated. Is that what I heard you say? Right. Okay.

But we can't always use those funds towards debt service. It wasn't what they were collected for. It has to go towards uh road repair.

Like there's a based on the ballot language for lost, you can only use it for certain items. I don't believe that um that like the debt service levy part of it or paying off uh portions of debt was part of the ballot language. Most of it had to do with the maintenance and maintenance construction uh reconstruction of roads and then the 20% savings for um towards property tax relief. and we throw that into our employee benefits section which decreases the amount of employee benefits that we're using or taxing for I should say not using.

And then finally because I'm sure some other council members we're running out of time that we're going to start the next work session. So last question. Yeah. Real quickly um I'm sorry. Oh. Uh, so what is the the total amount we are going to take out of the what some people would call the rainy day fund, the reserve fund?

Um, it was 2 Hold on. Give me one second. Uh, we have it budgeted to use 2.234. So 2,234,590. Um, that is that's part of that $4 million that's listed up there. Um but again, just because it's budgeted doesn't mean that we actually use it. Um it's kind of like a placeholder in the budget to make sure that we balance. Um a lot of times there's different fluctuations that come in with budgets. Like we might get different uh grants that we weren't expecting or uh we find grants throughout the year that we hadn't budgeted for. Uh it could be that like right now we don't budget our interest rate or our interest on our savings or not our savings on our uh any of our bank accounts um super high just because we don't know that that market's pretty volatile when it comes to interest rates. So we want to make sure that we are not over budgeting for revenue which then could affect us later.

Thank you. And it's important to know that that we don't always spend as as Bridget just said. And uh what did our cash reserves go up last year? 7 million. Yes. So, uh I I think I think we're we're in in a good place. Now, it's going to be up to the council to decide what they want to fund with the grout because whatever if we decide to change any of that that matrix, that 2.2 goes down. Okay. It's still going to be up to the council with that. Um Yeah, just one quick. We're we're way past though. So, what councilman was talking about is everybody gets these taxes every year.

And I asked Bridget early on if we could get this number here. There was a plus. Everybody's taxes went up everywhere, school, city, everything else. So, I asked if that would be zero or a negative number. Are you confident will be a negative number? So, everybody will see that on their tax tax paper.

Very good. Thank you very much. So, first of all, I want to thank you and your staff. You did a you really did a tremendous job working on this budget there. I know there's more questions, but please feel free to reach out to Bridget. She will make time in the next two weeks before we certify a budget to meet with any person individually or small groups to go over any questions that you have with this budget and and how we got to where we're at and where we're going. And I strongly encourage each and every one of you to come in here in two weeks with an educated opinion on where you want to where you want to go with this budget. Thank you, Bridget. With that, the next the next one is uh Todd Deerfield.