Waterloo finance director: proposed FY2026 levy rate will fall, but homeowners face small tax rise due to state rollback

Waterloo Finance Director Bridget Wood told the City Council at a special session that the city will certify a lower FY2026 levy rate than the figure published in notices, but many homeowners will still see a small increase in their property tax bills because the state’s rollback percentage rose.

Wood said the city had published a maximum levy rate of 22.68, but that the city will actually certify a levy near $21.79. “However, it would be approximately $11 a year increase in total property tax on a hundred thousand dollar house due to the rollback going up from 46% to 47%,” Wood said. She also described the state-required notice forms as “a little confusing.”

The discrepancy matters because the state Department of Revenue’s rollback determines the taxable value used to compute each homeowner’s bill. Council and staff explained the rollback—set by the state—is why an individual homeowner’s tax bill can rise even when the city’s certified levy rate is lower.

Wood described public engagement on the draft budget: the city’s Balancing Act budget simulator attracted 3,658 page views and 15 submissions with an average time of 16 minutes, 30 seconds. Submissions favored increased library funding, asked for better communication, and suggested cuts to police or fire budgets. The simulator also allowed residents to suggest revenue or expenditure changes; some suggested using fund balance to reduce the tax rate.

Wood gave line-item changes and fund-level totals for the proposed FY2026 budget. Highlights provided to the council included a proposed certified levy of about $21.79 (a 1.27% decrease from the current levy of 22.07), an estimated $10.62 annual increase to the city portion of taxes on a $100,000 home (presented as approximate), a reduction in general fund property tax revenue of $358,000, and a net increase in total city expenditures including debt service of $537,000. She said personnel costs will rise about 1.6% (mainly contractual), and other expense categories are down 1.7% overall.

Wood outlined changes across enterprise and special funds: a near $5.7 million decrease in the sewer fund budget (fewer SRF projects and lower fiber project costs), roughly $506,000 lower stormwater budget (fewer capital outlays), a $230,000 rise in the sanitation fund (personnel and contractual increases; that fund also covers code enforcement and animal control), and a $326,000 rise in road use revenue and expenses. Local option sales tax receipts are projected at about $12–$13 million and the related local option budget was shown as roughly $20 million, using reserves to balance. Federal block grant funds reflect an increase of about $518,000 (home federal projects), and housing-related funds rise about $147,000 largely from housing assistance payments and salary/benefit costs.

Council members and staff explained how homeowners may challenge assessed values with the county assessor. A council member noted homeowners can request an informal review or file a formal appeal (deadlines and procedures discussed in the session), and Wood confirmed taxpayers must provide documentation to support appeals.

Residents used the hearing’s public-comment period to press the council on communications and affordability. David Sturch (534 Glencoe Avenue) thanked the council for supporting Metransit’s levy-funded operations. Carol Gustafson (819 Denver Street) urged clearer public information after mailed notices and local press coverage, saying many older residents had been alarmed by the published numbers. Several residents said rising assessments and combined taxing-body increases (city, county, school) are pushing some households to consider moving out of Black Hawk County. Speakers named and recorded in the hearing included David Sullivan (11 81 4 Randolph Street), Andrew Gustafson (225 Gale Street), Carrie Morrison (2141 Avon Avenue), Cheryl Christianson (1702 East Mitchell), Ben Schwartz (595 Sunset Road), Candace Wolf (222 Borland Avenue), and Andrew Kessler (1000 Bishop Avenue); their remarks focused on affordability, the effect on renters, and requests for alternative revenue sources or spending cuts.

The council received and filed oral comments and closed the public hearing by motion; councilors voted to close the hearing and to receive and file the comments. Councilors said the council plans to vote to certify the levy at its next regular meeting in two weeks.

The finance director also told the council the city will publish a taxpayer receipt after the budget is approved and that the Balancing Act tool will show how city revenue is allocated; Wood said the simulator already includes a taxpayer receipt for FY2025 and she will post FY2026 details after certification.

Wood and councilors repeatedly emphasized that the published maximum levy is not the certified levy and that the published forms can make year-to-year comparisons appear misleading because they assume changes in assessed values and other taxing authorities’ rates.

The council did not certify the levy at the special session; staff will return with the certification and final vote at the next meeting.