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Sheldon council narrows 2026 budget choices, asks staff to prioritize $3.5M in potential TIFF projects
Summary
Council reviewed partner funding requests and a staff proposal to use Tax Increment Financing (TIFF) and limited bonding to accelerate public-works projects, directed staff to reserve $800,000 amid pending state legislation, and asked for a prioritized list of projects and cash-versus-bond scenarios at the next meeting.
Sheldon City Council spent the bulk of a long meeting narrowing options for the 2026 budget and tax increment financing (TIFF) after staff reported a roughly $5.1 million TIFF projection and proposed up to $3.5 million in essential-purpose bonding.
The council was told to hold $800,000 in reserve for TIFF after staff warned pending state legislation could remove the school foundation levy from the TIFF calculation and reduce available TIFF dollars by an estimated $800,000 to $975,000. City staff recommended coupling $3.5 million in TIFF bonding with about $600,000 in general-obligation financing for emergency services to produce a roughly $4.1 million package that would accelerate a slate of public-works projects.
Councillors pressed staff for detail and timing rather than a single package. "I’d like to hold off bonding until we need to bond," one member said, urging a pay-as-you-go approach if feasible. Staff acknowledged higher cash yields earlier in the fiscal year but said callable debt payoffs and project timing could justify borrowing in some cases.
Staff outlined a candidate list of capital priorities that includes Second Avenue planning, North Fifth lift-station flood mitigation, 19th Avenue resurfacing, frontage-road paving, stormwater improvements on Fourth Street, playground and pavilion projects at City Park, and potential participation in a school parking-lot project. Estimated costs and design status varied; staff said many figures are early engineer estimates with contingencies and would be updated.
Council members agreed to remove a $58,240 pilot daycare buy-down from the next budget and not to pay off a callable wastewater-treatment TIFF debt immediately. They asked staff to return in two weeks with a prioritized list of the top projects that could be funded either with available cash or by bonding, and with options that reflect the revised TIFF and cash-position figures.
The council also discussed the North Fifth lift station at length, weighing lower-cost flood-wall options and operational trade-offs against more comprehensive but costlier pump- and control-system relocations. Staff noted that flood mitigation would reduce—but not eliminate—the risk of backups during extreme events and that some mitigation approaches could complicate access for repairs during floods.
Next steps: staff will prepare an updated budget/TIFF sheet, supply clearer priorities and cost estimates, and present cash-versus-bond scenarios at the council’s next meeting so the council can decide which projects, if any, to include in a bonding package or pay from reserves.
