Waterloo council reviews proposed FY2026 levy rates, launches public budget simulator

Waterloo Finance Director Bridget Wood told the City Council at its March work session that the city’s proposed levy rate for fiscal 2026 is $22.6869 per $1,000 of taxable valuation and that the city is initially facing a roughly $2,300,000 budget deficit.

Wood said the figures presented are “not the ones that we will end up certifying, but these are the ones that we start with,” and explained the timeline for state reporting and public notices. She told council members the proposed rates must be entered on the state’s website by March 5 so the county auditor can mail notices to residents around March 20.

The finance director said police and fire would account for $14.34 of the proposed levy — about 63 percent of the general fund portion — and that debt service is proposed at 3.32151 per $1,000. Wood showed a breakdown of program functions and said public safety represents roughly $46,300,000 in expenditures in the proposed budget. She also said residential rollback set by the state stands at about 47.4316 percent, which affects the taxable value of homes and can raise total tax collections even if levy rates fall.

To widen public input, Wood introduced an online budget simulator intended to let residents and council members submit suggestions for revenue and expense adjustments, and to test scenarios such as using fund balance to close the deficit or lowering the levy. “I have it set out currently to show the deficit that we are working towards getting balanced,” she said, describing locked and adjustable line items and a comment field for submissions. The finance department will receive emails from the simulator and staff will “filter through” suggestions to determine feasibility.

Council members pressed staff on several practical points: access to the simulator (Wood said it is active now and open to anyone), the internal deadline for reviewing suggestions (staff will accept and review entries as they arrive and make further adjustments after the March 20 notices), and how the city might use local funding tools to reduce levy pressure. Councilmember Bozen and others discussed local option sales tax revenues, with Wood saying approximately $1,200,000 will be available under current rules (the city may use 50 percent of the local option sales tax in the coming year) and that the following year the available amount could increase toward a $2.4 million total depending on statutory phase-in.

Councilmembers also asked about long-term targets. Wood and council members noted a statutory or policy goal to reduce the combined levy to $8.10 by 2028; she said the library and a grant (identified as grout in the simulator discussion) had added roughly 27 cents each to that target. They discussed potential TIF (tax increment financing) options — including reviewing stronger-performing TIF districts before the December 1 TIF certification deadline next year — as one lever to manage property-tax pressures.

Wood and council members discussed additional revenue and cost drivers: recent state changes that reduced roughly $2,000,000 the city previously used for police services and property tax relief, projected increases in police salaries and related pension costs (the pension share fluctuates, Wood said, roughly between 24 and 27 cents), and reductions in rollback-related new revenue (under $500,000 entering the coming fiscal year compared with hundreds of thousands in prior years).

No levy or budget ordinance was adopted at the work session. Councilmembers asked staff to continue refining options and to collect public input via the simulator before certifying final rates. Wood said the simulator will be updated to reflect the adopted budget after final approval and will remain available for adjustments and suggestions year-round.

The meeting opened with a motion to approve the agenda and the minutes of Feb. 17, 2025, which the council approved by voice vote; the session closed on a motion to adjourn.