New Prague City Council reviews proposed 5.46% levy increase and debates $100,000 building reserve

The Chair opened a special New Prague City Council budget meeting and staff presented a proposed 2026 tax levy of $5,603,735, which staff described as “about a 5.46% increase over the 2025 levy, with an average impact to residents of 4.15%,” and invited questions from the council.

The council pressed staff on recent adjustments that trimmed the levy. Staff said a $20,000 correction—shifting an expense to the park-equipment fund rather than the levy—reduced the proposed increase from about 5.84% to just under 5.5%. Staff also noted other small changes, including updated estimates for utilities at the new police building and moving certain ambulance fees, that slightly lowered the levy since the September preliminary figures.

Councilmembers discussed whether to use this year’s excess interest income or other one-time surplus money to reduce next year’s levy. One councilmember said using nonrecurring funds for one-time projects could help lower the levy without creating an ongoing shortfall, while staff cautioned against treating interest income as a recurring revenue source and recommended using one-time overages for one-time expenses.

A separate line-item discussion covered park funding: staff recounted that a park-board request originally listed at $110,000 was cut back, with about $45,000 proposed for a cement project (improvements for pickleball and extended ice) and an additional amount moved into the park-equipment fund; staff said correcting how that expense was shown on the revenue side reduced the levy by $20,000.

The meeting included a substantive exchange over a $100,000 budget allocation for building repairs. A councilmember opposed holding that money in the budget now and urged removing the $100,000 to lower the levy, arguing the city could manage smaller repairs from general funds if needed. Staff and other councilmembers pushed back, saying the $100,000 was intended as a reserve to avoid large levy spikes for building needs and to smooth future impacts; staff noted a 2023 facility study that estimated roughly $1.5 million in long-term building needs and said staff member Matt is assembling firm cost estimates for windows, roof and tuckpointing.

Staff confirmed the firefighter pension is generally funded through a state pass-through (recently about $108,000) and that the city maintains an emergency pension reserve previously set aside (about $40,000). Council and staff also discussed debt-service timing—including a fire-department bond with larger payments beginning in 2027—and whether available fund balances could legally and prudently be applied to reduce future levies or accelerate payoff where allowed by bond terms.

As next steps, staff said enterprise funds (golf, water, sewer, electric) will present at the council’s second November meeting, and the golf-course CIP will come before the council at a special meeting scheduled for November 17. Councilmembers asked staff to review department line items for potential one-time reductions and to continue work with auditors and financial advisors to identify funds that could offset future levy increases.

The chair moved to adjourn at the meeting’s close; a councilmember seconded, the council voted in favor and the meeting ended.