Milaca council approves preliminary 2025 budget and proposes 4.9% tax levy

The Milaca City Council on Sept. 25 approved Resolution #24-29 adopting a preliminary 2025 budget and a proposed 2025 tax levy of 4.9%. The motion, made by Councilmember Norris Johnson and seconded by Councilmember Laurie Gahm, carried with all in favor.

City Manager Tammy Pfaff told the council the proposed levy had originally been calculated at 8.01% but council reductions totaling $41,107 — including $11,107 in reduced Transition Aid assumptions and an additional $30,000 in cuts — produced the lower 4.9% figure. Pfaff said Small Cities Transportation Aid arrived at $53,610 and “this will be under Other State Aid Grants. This will be offset by Public Works — Streets as this is what it can be used for,” and she confirmed that the transportation aid is additional revenue the city had not budgeted previously.

Why it matters: the preliminary budget frames the city’s capital priorities and revenue assumptions ahead of the required Truth in Taxation hearing. The council set that hearing for Dec. 18, 2024, at 6:30 p.m.

Key budget details discussed at the meeting included a $6,000 increase in the Police Department budget to support restoring an additional hire toward a six‑officer complement; changes to wages, benefits and auto expense in Public Works; and department reductions in Parks and Airport allocations tied to staffing adjustments. Pfaff said digital meter deployment and associated EDP, software and design support raised water‑system costs and that the water fund would show a planned cash spend down of $86,227, with additional cash likely needed for the Milaca Junction Addition water/sewer extension.

Pfaff said the city will conduct a water rate study with follow‑up meetings and a presentation to the council on Nov. 20. “We will have a $1.5 million water tower rehabilitation project coming up in 2027,” Pfaff said, and she described related 2027 work that could include a roundabout on Highway 23 and replacement of water/sewer mains in five areas, with more than $700,000 of investment tied to those improvements. Pfaff cautioned that if future development requires new water/sewer installations, the city might need to spend down water‑revenue funds to accommodate those projects.

Council and staff reviewed the capital improvement plan, which Pfaff said is much smaller this year with no large purchases planned; the Fire Department’s pumper truck remains listed, with $864,890 noted in the file. The city reported equipment reserve balances of Airport $6,325; Parks $111,520; Police $113,000; and Fire $548,622 (the latter identified as funding to be used toward the new pumper). Other CIP line items called out during the meeting included $62,162 for bullet‑proof glass at police and reception areas, $15,000 for street maintenance, $35,000 for sealcoating and $45,000 for a boiler replacement at Public Works.

On airport matters, Pfaff said $12,500 in state grant funding was marked for a card reader and for a CZAP study required to earn application points for future grant scoring. The council asked staff to gather comparative data on airport lot lease rates before making any change to local lease charges. Mayor Dillan also said a donated shelter should be installed at Veterans Memorial Park.

Councilmember Norris Johnson asked whether the $53,610 transportation grant could be applied to reduce the levy. Pfaff replied the funds must be used for streets and cautioned that reducing cash reserves could leave the city vulnerable if other revenues (such as local government aid) fall short.

The council also formally called for a Truth in Taxation public hearing to be held Dec. 18 at 6:30 p.m.; the motion by Councilmember Lindsee Larsen, seconded by Councilmember Norris Johnson, passed unanimously. The meeting adjourned at 6:14 p.m.

What’s next: the water rate study will be reviewed in follow‑up meetings and presented Nov. 20; the Truth in Taxation hearing is scheduled for Dec. 18, when the council will hear public comment on the levy and may revise the final tax levy prior to certification.