Onalaska council weighs new fees, grant application and staffing as budget gap looms for 2026

Onalaska’s Common Council held a special meeting July 19 to begin setting a budget strategy for 2026, reviewing a projected deficit and a range of revenue and cost options including fee increases, a new fire-assessment fee, staffing changes and a federal SAFER grant application.

City Administrator Rick presented the report and told the council the work group’s objective: “our goal is to have a balanced budget,” and that achieving it will require a mix of measures. The council discussed short-term revenue steps staff urged the council to approve now to reduce the 2026 gap and longer-term changes that would require study, public engagement or consultant work.

Why it matters: staff projected a roughly $388,000 deficit for 2026 in materials distributed to council, and notified members that recent health-insurance premium estimates would increase that figure further. The council must decide quickly if it will deploy fee changes or other revenue tools ahead of the August budget deadlines.

What council considered and debated

- Existing revenue review: staff recommended a department-by-department review of fees and charges to capture modest revenue increases where justified.

- Public fire-protection charge (water bill): Finance staff said increasing the line-item that covers hydrant/water-for-fire-protection costs would shift an estimated $412,000 in current general-fund transfers onto utility customers. Finance noted the Public Service Commission (PSC) must approve the change; Sabrina said “Ehlers told us that it was kind of the path of least resistance” among options evaluated.

- Municipal vehicle registration fee (“wheel tax”): staff presented a state-administered vehicle-registration option remitted back to the city. Using a conservative vehicle count, staff estimated a $25 fee would yield roughly $412,000 annually to support transportation/street maintenance costs.

- Fire protection assessment fee (new property-based fee): Fire department leaders proposed a fee assessed to structures (a square-footage model was suggested) to fund fire operations and reduce general-fund pressure. Chief Luddy said the assessment “would allow the fire department to maintain a stable funding” stream; staff recommended a consultant to build an equitable model and assess legal and procedural steps.

- SAFER grant (FEMA): the council discussed applying for a federal Staffing for Adequate Fire and Emergency Response (SAFER) grant to fund additional firefighters for the first three years. Staff described typical SAFER funding levels (75% first year, 75% second year, 35% third year) and warned year‑four funding responsibility would revert to the city unless another revenue source (for example a fire-assessment fee) covered ongoing costs.

- Other service reductions or program options: the staff work group reviewed hypotheticals including temporary closure or reduced operations of the aquatic center, library facility costs (the county funds library staff; the city funds the facility), changes to transit/shared-ride, and switching garbage pickup to every-other-week. Staff emphasized these were high-level options, not immediate recommendations.

Council direction and votes at the meeting

Votes at a glance - Increase public fire-protection charge on water bills (staff estimate: +$15 per household per quarter; ~ $60/year for a typical single-family account) and enact a municipal vehicle registration fee of $25: Motion made by Alder Nash, seconded by Alder Knott; motion passed (voice vote recorded as passed). Staff said PSC approval would be required for the water-based charge; the municipal registration fee would be collected by the state and remitted to the city after a 90-day implementation notice.

- SAFER grant application for six firefighter positions: Motion to direct staff to file the SAFER grant application for six firefighters passed on roll call 4–2 (Ayes recorded: Milke, Benash, Lowendorf, Wolf; Nays recorded: Knott, Juracek). Council discussion noted the grant application deadline is imminent and that SAFER awards cover much, but not all, wages during the first three years (so the long-term funding plan must be set).

- Other: council asked staff to return at the July meeting with a proposed timeline and next steps for a fire-protection assessment fee study (staff estimated consultant cost about $30,000). A separate motion to study a streetlight-user charge did not receive a second and was not acted on.

Key clarifying points and caveats - The $388,000 deficit figure is a staff projection delivered with the meeting packet; staff warned the number will change as contract negotiations and new insurance premium estimates are incorporated. - Updated health-insurance projections received just before the meeting suggested an 18–29% increase in premiums, which staff said would add additional pressure to the deficit. - SAFER grant structure explained in staff materials: typical FEMA SAFER award shares 75% first-year personnel costs, 75% second year, 35% third year; municipalities must plan to fund positions after the grant period. - Staff estimated consultant work to design an equitable fire-assessment fee (data collection, model and ordinance development) at roughly $30,000; timing to run the RFP, collect data and produce a final structure would likely carry into late 2025 if started immediately.

What happens next

Staff will prepare implementation steps and ordinance drafts to bring back to the council: (1) start PSC application work and fee drafting for the public fire-protection charge; (2) draft a municipal registration-fee ordinance (state notice required); (3) proceed with SAFER grant application for six positions per the council vote and begin recruitment planning if the award is received; (4) prepare a scope and budget for a consultant to design a fire-assessment fee and return with recommendations and legal analysis.

Quotes “our goal is to have a balanced budget,” City Administrator Rick said, framing the presentation as the start of a multi-step process. “We're gonna have to make some tough decisions,” Alder Knott said, urging members to address structural shortfalls rather than postpone action. “The fire protection assessment fee would allow the fire department to maintain a stable funding,” Chief Luddy said, describing how a property-based assessment could be used to pay for wages, equipment and training.

Ending

The council instructed staff to return with detailed budget language and timelines as soon as possible; staff emphasized some actions (PSC application, municipal registration ordinance and SAFER grant submission) have short windows that require prompt follow-up. Additional public outreach and legal review were directed before any fee would be finalized and implemented.