River Falls staff present updated 2026 budget; fire station, library fundraising and borrowing highlighted

City Finance staff on Monday walked the River Falls City Council through updates to the proposed 2026 portion of the city’s 2025–26 biennial budget, highlighting planned borrowing for a new fire station, library trust fund activity, capital projects and an estimated drop in the mill rate following revaluation.

Josh, finance director, told the council the updated all-funds proposed budget for 2026 is $66,635,649 — roughly $12.8 million higher than the original biennial plan — but that most of the increase is concentrated in a few large items. “One of which is just a very large ticket item that we're all, kind of aware of with [the] fire station,” Josh said, describing the station as the primary driver of the capital fund increase.

The presentation broke the changes into categories. In the general fund staff identified an $856,000 net increase from the original 2025–26 budget, explained primarily by $789,000 moved for cash financing of the fire station and about $255,000 in added operating costs to reflect inflation and current service assumptions. Personnel costs in the general fund were revised down by roughly $217,000 after staff changed how they allocate employee time to other funds, moving from transfer-based allocations to directly charging time to the benefiting funds.

Library capital work and fundraising: Josh said the ongoing library building project remains largely grant-funded for the initial phase (about $4 million), and that the city is budgeting a roughly $2.3 million “future phase” for library work expected to be paid by the Library Foundation’s capital campaign and recorded in the library trust fund. “While the library foundation is fundraising the money, we're ultimately the ones contracting with the vendors to complete the work,” Josh said.

IT and facilities adjustments: staff reported a roughly $161,000 increase in the information technology fund, driven by capital items added to the CIP including fiber to the police department, access-control panel replacements, citywide network switch replacements and steps toward a zero-trust network architecture. Facilities adjustments totaled about $101,000, including front-step work at the Glover Schoolhouse and repairs to Larson Park’s garage, plus consolidation of scattered facility budgets into a single facilities maintenance fund.

Fund balance and levy math: City staff showed projected unassigned general fund balances that exceed the council’s minimum 40% of budgeted general fund expenditures and in the near term are estimated to be above a 50% target. Josh said staff estimate unassigned fund balance at about 55% of the projected 2027 budget (based on the fiscal plan). He also reviewed levy calculations: the proposed levy to be collected in 2026 is $8,479,098 versus $8,270,000 in the prior year (a gross increase of about $208,000). Because River Falls experienced strong new construction this year, the state’s new-construction allowance (about $222,000) exceeds that gross levy increase, yielding a small net levy change of roughly negative $14,000 (a -0.17% net change on the existing tax base).

Mill rate and household impact: Using finalized assessed values (post-open-book and board of review), staff estimated a city-only mill rate near $4.34 per $1,000 of assessed value. With an average residential assessed value around $350,000, Josh presented an estimated city portion tax bill of about $1,522 — approximately $48 lower than the previous year — and cautioned this excludes other taxing jurisdictions and any Tax Increment District portion.

Capital Improvement Plan and planned borrowing: Staff summarized a CIP totaling $19,668,868. The fire station is the largest single project (about $10.5 million, including $500,000 design already budgeted). Staff proposed borrowing $7 million for the fire station in early 2026 and said roughly $240,000 of annual payments would be offset by a rural fire association contribution. The council also heard plans to borrow roughly $1.5 million for the Lumetti (interceptor) sewer project for design and construction, and to consider revenue-backed bonds for electric-utility improvements. Josh said the city will evaluate the mix of borrowing versus using unassigned fund balance for a roughly $500,000 funding gap on the fire station when staff begins the borrowing process in January–February.

Policy context and financing choices: Staff discussed levy-limit mechanics and the trade-offs between general-obligation (G.O.) borrowing and revenue-backed debt. Josh explained that G.O. borrowing can give the city more levy-limit capacity under state rules because the levy limit calculation “claims” debt service even when a utility’s own revenues will pay the debt. Council members asked whether certain utility projects require PSC approval; Josh clarified the Public Service Commission must approve the project but not the specific borrowing mechanism. Staff also noted options such as Clean Water Fund loans or public-lands trust loans have different terms and ratios that affect planning and bond-ratings conversations.

Council directions and next steps: Staff said the council will be asked to approve the first reading of an ordinance to adopt the 2026 budget on Oct. 28, 2025, and to hold a public hearing and second reading on Nov. 11, 2025. Josh said staff will evaluate the precise borrowing plan, interest-rate environment and the mix of debt versus fund balance application and will return with recommended contract and financing documents during the implementation phase.

Questions from council members touched on impact fees (staff said park-impact fee assumptions are included; other impact fees were not changed), possible new hires (staff estimated the cost of a half-time code-enforcement position would be roughly $70,000 minimum and a full new FTE range from roughly $110,000–$200,000 depending on classification), and whether donations raised by the library foundation must be transferred through the foundation before the city records them in the trust fund (Josh said checks written to the city are receipted directly to the library trust fund; checks to the foundation pass through to the city when transferred).

What matters: The workshop presented a budget that staff say keeps River Falls under the statutory levy limit while scheduling borrowing for a major public safety project and preserving fund balance levels above council policy targets. Council members will review the ordinance readings and staff’s borrowing recommendations in the coming months before formal adoption and tax rate finalization.