Clive staff outline FY 2627 budget plan, propose insurance levy and recommend ending Station 22 agreement

City officials on Feb. 26 presented the proposed fiscal 2627 budget and flagged revenue pressures tied to recent state property-tax reforms.

City Manager Matt opened the workshop by outlining the budget framework and the financial strategy from last year’s strategic planning, saying staff had modeled options to protect core services while reducing reserves. Finance staff proposed modest levy shifts that would move some costs out of the general fund and into earmarked funds.

Finance staff member Liz, who led the levy discussion, said the city’s trust and agency levy is projected to generate about $2.98 million and that staff recommends increasing that levy from $1.40 to $1.46, producing roughly $226,000 in additional revenue. "With the proposed $1.46 levy rate, we'll need to closely monitor this fund," Liz said, citing rising pension and insurance costs and a budgeted 5% increase for insurance expenses.

Staff also proposed creating a new property and liability insurance fund. The council was told an initial 1¢ levy would generate about $21,000 and, along with transfers from the general fund and enterprise funds, would seed the dedicated insurance fund. "This will create transparency for insurance costs rather than embedding them in the general fund," Liz said, adding that fully funding the program would require a substantially larger levy (staff estimated a full funding scenario could require roughly 20¢).

The budget overview noted exposure from state-level changes, especially House File 7 18, which staff said has reduced local levy authority and forced a structural haircut on taxable valuation growth. Matt said staff factored those legislative risks into 10‑year cash‑flow modeling and presented four buckets of possible responses: expenditure reductions, revenue enhancements (fees, cost recovery), expenditure shifting among funds, and CIP/CEP adjustments.

Public safety and service delivery changes were highlighted as examples of potential savings. Staff recommended including in the budget a plan to end the city’s 2080 agreement with West Des Moines for Station 22; the proposal would require a six‑month notice to take effect Jan. 1, 2027. Staff estimated a half‑year savings in FY 27 of about $210,000 and a full‑year reduction of $420,000 thereafter. "We would bring a formal letter for council authorization in June," Matt said.

Police and fire department presentations described department needs and ongoing programs. The police chief reviewed staffing, a multi‑year pledge of $500,000 to support a crisis intervention team through the Iowa Primary Care Association (drawdowns scheduled FY27–FY30), and a plan to seek $120,000 in fundraising to replace the K‑9 Dutch. The fire chief outlined recent successes—including a low‑cost disposal of legacy firefighting foam—and emphasized training and equipment needs.

Staff also reviewed revenue assumptions, including a roughly $400,000 gain from taxable valuation growth (net of rollback adjustments), about $1 million in hotel‑motel tax receipts, and the city’s practice of passing solid‑waste increases through to customers. The proposed budget shows a planned use of reserves of about $1.3 million driven by conservative spending assumptions and one‑time items; staff stressed the goal of bringing reserves toward the council policy ceiling over time.

Council set the required public hearing date for the budget: March 26 at 5:30 p.m. The council will consider adoption in April and additional ordinance readings for utility rate changes in the coming months.