Davenport City presents FY2027 $271.6M budget with lower property tax levy and modest deficit

Davenport City staff presented the recommended fiscal year 2027 operating budget, a $271,565,000 package that reduces the property tax levy to $16.58 per $1,000 of taxable valuation while preserving current service levels, Speaker 2 said.

The proposed budget is essentially balanced and complies with the city’s financial policies, staff said. The operating portion increased about 1.63% (roughly $2.8 million), driven primarily by employee salary and benefit costs tied to negotiated contracts, while capital spending is down about 3.8% and debt declined roughly 2% compared with the prior year.

Speaker 2, the budget presenter, emphasized the city’s strong fiscal position and conservative approach: “We continue to be in a stable condition, and we are in a positive financial condition,” they said, noting an unassigned general fund balance target of 25 percent and recent favorable bond ratings (S&P AA; Moody’s Aa2 and a G1 governance rating).

Why it matters: the budget shifts resources to cover rising personnel costs and sustain public safety while keeping rate and fee changes modest. The general fund shows a budgeted deficit of about $462,000 (under 1 percent of the overall budget), which staff described as manageable given conservative revenue assumptions and an anticipated state backfill estimated at about $800,000.

Key provisions and figures - Overall budget: $271,565,000 total (operating, capital, debt). Speaker 2 reported an operating budget figure presented in the slides and said corresponding revenue projections remain stable. - Property tax levy: reduced to $16.58 per $1,000 taxable valuation, according to Speaker 2. - General fund: a roughly $462,000 budgeted deficit for FY2027 (down from a $577,000 projected deficit the prior year). - Employee costs: the main driver of operating increases; the city budgets 100 percent of salaries (does not assume vacancy savings). - Public safety: public safety salaries and benefits represent a large share of the general fund burden; the police budget is roughly $34 million and the fire budget roughly $23 million in the proposed plan. - Capital projects: capital is down year-over-year in the FY2027 proposal; the city plans a nearly $26 million digester project at the water pollution control plant to be paid in cash rather than debt. - Sewer rates: following a PFM-recommended rate study, staff proposed no change to sewer rates in FY2027 (0% change) with modest increases planned in adjacent years. - Enterprise funds: solid waste, clean water and parking funds were reviewed; solid waste shows a proposed FY27 surplus of about $280,000 and a recommended modest annual rate escalation (~3%) that would increase monthly residential fees by roughly $0.47–$0.72 depending on can size.

Departments and program notes Speaker 2 walked through individual department budgets and drivers, citing insurance election effects on council and mayoral office costs, a finance-to-IT staff reassignment that shifted expenses, a $150,000 software increase for IT, and a permanent social worker position added to the library budget (previously funded with ARPA). The River Center/Adler Theater continues to receive a hotel/motel tax subsidy of about $655,000 and a $100,000 debt fund transfer to support operations.

Intergovernmental and governance context Speaker 2 noted the city maintains a 28E-style agreement for the regional water pollution control plant with Davenport, Bettendorf, Riverdale and Panorama Park, holds biannual budget reviews for that plant, and will meet rating agencies in early March. Staff also plans to monitor state property tax legislation that could affect local levies.

Process and next steps Staff outlined the calendar: a capital improvement budget workshop begins Feb. 3; a public hearing on the proposed tax levy is scheduled for March 25 at 5 p.m. in council chambers; the council is scheduled to adopt the FY2027 budget on April 22 and certify it to the county on April 23. Collective bargaining with police and fire will begin in calendar year 2026, staff said.

Speaker attributions in this report come from two unnamed meeting participants identified in the transcript as Speaker 2 (the presenter) and Speaker 1 (questions from council or another participant). Direct quotes and specific figures in this article are attributed to Speaker 2, the meeting’s budget presenter.

The council will receive additional department and capital detail in follow-up materials and a memo at the conclusion of the budget review process before formal adoption.