Council approves tax-levy special revenue and departmental funds; health-insurance fund used to buy down levy

At the Feb. 13 budget workshop, the Clinton City Council approved a set of tax‑levy special revenue funds, the city’s self‑funded health insurance fund transfer to reduce the proposed levy, and a package of departmental special‑revenue funds.

Levy buy‑down from self‑funded health insurance reserve

Finance staff explained that the city will use a portion of the self‑funded health insurance fund’s reserves to “buy down” the proposed property‑tax levy for FY 2026. Staff said the self‑funded health plan carried an expected ending balance of about $3.9 million after this year’s projected revenues and expenses; the presentation showed an expected balance as of June 30, 2026 of about $3.9 million and said the plan holds roughly six months of reserves under the city’s policy. Staff cautioned this is a one‑time buy‑down strategy: using reserves to lower the proposed levy this year reduces available fund balance and may mean less headroom to reduce the levy next year.

Special revenue funds and departmental budgets

Council approved a set of departmental special‑revenue funds (police grants and programs, recreation program fees, library trust and donation funds, fire department donation funds, and similar items) and the tax‑levy special revenue funds that pay property and liability insurance and the police/fire retirement fund. Staff also presented the road‑use tax fund adjustments and minor edits that reduced a previously proposed $500,000 street maintenance line to $300,000 for certain contract painting and striping work; council approved the road‑use tax fund as presented.

Council action

The council approved the following by roll‑call vote (all approvals were unanimous among members present): the tax‑levy special revenue funds and the related self‑funded insurance buy‑down, the departmental special revenue funds listed in the packet, and the road‑use tax fund. Council directed staff to produce updated levy calculations showing the buy‑down’s effect and to return final documents in time for the March proposed‑levy posting deadlines.

Staff cautions and next steps

Staff warned that the reserve used to lower this year’s levy is finite; while it reduces taxpayer bills this budget cycle, it reduces the amount available to offset future levy increases. Finance staff said they will prepare a version of the levy without the buy‑down so council can see the difference before final adoption. The council also asked for a follow‑up showing the health‑fund buy‑down’s impact on the next fiscal year’s levy planning.