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City adopts FY2026 budget; council and BPW staff outline utilities, capital plan and tax-rate limits
Summary
Holland City Council adopted the FY2026 city budget that combines city and Board of Public Works revenues of $224.4 million, approves a $35.7 million general fund and a five‑year capital plan, and heard BPW presentations on electric, broadband, water and wastewater finances and planned rate adjustments.
The Holland City Council approved the city’s fiscal year 2026 budget after staff presentations that combined city operations and Holland Board of Public Works (BPW) utilities.
City Manager Keith Van Beek introduced the budget as a “year of stability,” and Lynn (Staff member, budget presenter) said the combined FY2026 total revenues are $224,364,400 and the general fund revenues are budgeted at $35,700,000, with property taxes comprising about $17,200,000 (roughly 48% of general fund revenue).
Holland Board of Public Works representative Dave Koster briefed council on the four utility areas. Koster said the electric utility has no rate changes planned for the coming year and remains among the lowest-cost providers in the Lower Peninsula; BPW capital investments for electric distribution improvements total about $82,000,000 over five years. Broadband (Holland City Fiber) is in mid-buildout: Koster said about $24,400,000 is budgeted for passings (street network) and roughly $12,000,000 for drops to individual premises (combined roughly $33,000,000). Water faces a multi-year replacement program and a state regulatory timeline to replace certain lead gooseneck services; BPW staff proposed a tiered-rate approach that keeps the base tier steady while raising upper tiers (the second of three planned revenue adjustments) and charges irrigation meters at the higher tier to manage demand. Wastewater would see a modest proposed increase (about 3%) and adjustments to industrial surcharge rates; Koster highlighted savings from the new digester and pending federal elective-pay funding of about $10,900,000 under Inflation Reduction Act provisions.
The budget process also includes a five-year capital plan; Lynn said the combined city and BPW five-year capital investments total roughly $269,000,000, with $71.7 million budgeted in FY2026. Projects cited in the presentation included the Holland City Fiber project, the ice park, Van Roolty Farm work, a pump track, and recycling center investments.
Council discussed property-tax calculations. Lynn walked through the state-required calculations, including the Hadley rollback (reduction) computation and the Truth in Taxation framework; Lynn said the proposed levy rate is 13.8692 mills, unchanged for 14 years, while the city’s charter authorizes up to 17.5 mills. Mayor Freeman warned that continuing reductions from the Hadley rollback could eventually force a local decision by voters to restore the tax-cap authority. “That orange line, in just a few years, is going to hit the teal bar,” Freeman said in a prepared address to council, urging public awareness and future voter consideration to preserve local decision-making on tax rates.
Council moved to approve the FY2026 city budget; Councilmember Freeman moved the motion and Councilmember Soule supported it. The roll call vote was unanimous.
Council and staff said the budgets and capital plan will guide departmental operations and that quarterly updates on strategic and business-plan tasks will continue.
No immediate millage increase was adopted; staff outlined the calculations that determine the city’s allowable levy under state law and how the rollback formula has reduced permissible levies over time. Council directed continued public engagement and education about those constraints and possible future ballot measures if local restoration of authority is sought.
