City manager presents conservative 2026 budget as sales tax and water revenues fall

YANKTON, S.D. — City Manager Amy Leon presented the proposed 2026 budget to the Yankton City Commission on Aug. 18 and described a plan built on restraint as sales-tax and utility revenues show signs of decline.

"The budget is just a plan," Leon told the commission and the public at a budget work session. "It's a compass, not a cage." She said the budget as presented is conservative and that commissioners would not be asked to vote on it that night; the first reading would occur later in the process and additional readings could follow if substantive changes are required.

Leon said the city faces a drop in sales-tax receipts and lower enterprise revenues after the loss of a long-standing local employer, which she named in the meeting as Sympls. She said water sales through July 2025 were down roughly 14% compared with the same period in 2024 — about 38.3 million gallons through July 2024 versus about 32.9 million gallons through July 2025 — while operating costs such as electricity have risen. "So that's just one of those challenges that we have to face," Leon said.

Nut graf: The presentation framed the 2026 budget as prioritizing core services and planned capital already under way while cautioning that some projects and discretionary programs could be delayed if revenues fall short. Leon explicitly asked the commission to expect more month‑by‑month updates on sales tax and warned that some budgeted items might not proceed if revenue does not support them.

Most important figures and rate proposals

- General fund (without carryover) estimated at about $4,600,000; the city budget was presented with a planned 0 balance (no built‑in reserve) absent carryover. - Total budget: Leon said last year’s budget exceeded $93 million and the proposed 2026 budget is about $72 million (largely reflecting previously planned capital spending that is underway). - The city budget shows roughly $20.8 million committed in projects while projected revenue for those categories is about $16 million, making carryover or other funding important to proceed. - Proposed utility adjustments: 3% increase to the water rate (about $0.95/month for a typical user), 3% increase to wastewater (about $0.36 plus a planned surcharge tied to low SRF loan terms that Leon estimated would add roughly $7 monthly while it is in effect), and a proposed 3% increase for solid waste (approximately $0.80). Leon said the average residential user would see about a $9.11 monthly increase in combined utility charges under the current proposal. - Personnel and benefits: a 1.26% step in the salary plan is budgeted; collective‑bargaining talks were under way with the Fraternal Order of Police and AFSCME and Leon said tentative agreements would be brought forward. Health insurance was budgeted at a 10% increase while quotes were being solicited.

Infrastructure, capital and software

Leon said the budget continues to prioritize core services — water, wastewater, streets, public safety, parks and library operations — and that much of the year‑to‑year change in department budgets reflects the city’s higher capital threshold that moved items from capital into operating and maintenance. She also highlighted work already funded and under way, including wastewater and water treatment plant projects financed in part by SRF loans and other grants and noted the city has begun a new financial software implementation.

Water customers outside Yankton

Utilities staff Kyle Goodmanson told the commission he expects a bulk water purchaser, identified in the meeting as Nebraska Rule of Water, to begin buying water "late this fall" or possibly in the following spring. Goodmanson estimated the system’s maximum sale would be about 800,000 gallons per day but said initial purchases would likely be nearer 300,000–400,000 gallons per day. He said the city would sell bulk water at a lower rate and that "we will make out some of that revenue. Not quite half." That sale, he said, would not fully offset the revenue lost when the employer left town.

Fire department and equipment requests

Commissioners pressed staff about large increases in several fire‑department line items moved into operating budget lines. Fire Chief Linke explained the increase for turnout gear: "To outfit our firefighters, it's about $5,000 per firefighter. And so we try to purchase about 5 sets of that bunker gear per year." Linke detailed other equipment moved from capital into operating — hose and nozzles, pagers, thermal imaging cameras and ladder‑related equipment — producing roughly $98,000 in those line items once aggregated. The department said it had been awarded a state grant of $11,250 to help buy face pieces for individual firefighters.

Sales tax rebates and mall project

Commissioners discussed a proposed sales‑tax rebate tied to a new mall development. Finance staff estimated the new retail anchors could generate an estimated $400,000 annually in sales tax attributable to the project (a preliminary estimate, staff said). The working plan presented at the meeting split that estimate into $200,000 from the second‑penny sales tax, $100,000 from the general fund and $100,000 from the city’s BBB allocation. Leon and staff repeatedly cautioned the split is an estimate and that the actual revenue mix and whether the receipts represent new taxable sales or "leakage" from other local businesses will only be known after the project opens and actual receipts are collected.

Library, facade grants and other discretionary items

Leon said a planned library facility project would be paused while staff and the library trustees reassess timing and operating‑revenue sources; she and library representative Dana said they would meet with the library board in September. Leon noted some discretionary programs already budgeted — such as a facade grant program and downtown events — might be postponed or scaled back if revenues require it.

Outside agency funding and controversy over Yankton Thrive

Commissioners discussed the annual grant the city provides to Yankton Thrive (presented in the meeting at roughly $460,000 per year for economic development and tourism offices, combined with private and other public funding). Commissioner Conkling criticized Thrive’s transparency and size, saying, among other points, "Thrive owns 104 parcels" and arguing the nonprofit’s minutes and some project details should be publicly available when taxpayers provide funding. Kevin Moe, chair of Yankton Thrive’s board, described the organization’s four pillars (business services, tourism, workforce development and workforce housing) and said some board discussions are confidential because they concern private investment prospects; he said the board requires NDAs for some matters. The commission debated whether Thrive funding could be separated out and considered on its own during the formal budget vote; legal staff advised that routine budget appropriations are legislative decisions and that the conflict‑of‑interest threshold for abstentions or recusals differs from quasi‑judicial standards.

Next steps

Leon urged the commission to expect monthly sales‑tax updates and signaled that some budgeted items might not proceed if revenues do not support them: "If it's not an emergent, or urgent request, maybe it's not something that, fund this year." She reiterated that no final vote was held that night and that the commission will consider readings and any amendments at scheduled hearings. Commissioners and staff discussed the possibility of additional work sessions if needed.

Ending

The commission took no formal votes on the budget at the session; the work session ended with direction to continue staff follow‑up on specifics and to return for formal readings and a public hearing later in the budget schedule.