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Ottumwa City staff preview 2027 draft budget, warn of shortfall and lay out levy options
Summary
City staff told council the preliminary 2027 draft budget shows a significant shortfall; they proposed 13 new positions (largely firefighter‑EMTs), outlined benefit/levy changes and one‑year carry options, and set deadlines to refine levy numbers before the March 5 submission.
City staff presented a preliminary overview of Ottumwa City's draft 2027 budget at a council work session, warning of a material shortfall and outlining options to reduce the proposed levy.
The presentation, led by Mr. O'Donnell, said taxable valuations rose about 4.8% this cycle but that state legislation (referred to in the meeting as House File 718) reduces the consolidated general fund levy’s ability to capture that full growth, leaving the city to plan on roughly a 2.8% revenue increase in that levy. "These are not the final requests ... this is kind of that starting point," Mr. O'Donnell told the council, emphasizing figures were preliminary.
Why it matters: staff tied the projected shortfall to an array of increases in the budget request — property insurance and replacement-value reappraisals, additions to police and fire retirement costs, FICA/IPERS increases, a projected 12.8% rise in health insurance premiums and a set of proposed new positions budgeted as full‑family coverage. Among the line items given during the overview were additional revenue figures and increases described by staff: consolidated general fund new tax dollars about $171,872; property insurance increase about $107,276; police and fire retirement about $128,437; and FICA/IPERS about $207,164 (roughly $27,444 attributable to new positions). Staff also attributed roughly $415,000 of increased other-employee-benefits costs to the new positions request.
Staff listed 13 proposed hires in the draft: nine firefighter/EMTs, an administrative assistant for the fire department, a fire inspector, an additional building inspector and a planner for community development. Mr. O'Donnell said budgeting those positions as full‑year, full‑family coverage was intentionally conservative and that the city could budget them on a partial‑year basis to reduce the immediate levy impact.
Options under consideration included increasing employee premium contributions (staff cited current employer/employee sharing as roughly 90/10, with 85/15 and 80/20 offered as alternatives), offering alternate or high‑deductible plans, and exploring pooled insurance purchasing with other governments to obtain lower rates. Staff said they will consult employees with plan options and gather feedback before implementing changes; Mr. O'Donnell indicated implementation discussions would begin with departments with a target implementation of July 1.
Staff also walked council through nonoperating choices to manage the gap: using reserves for capital projects, re-evaluating amenity subsidies (the beach was noted as a subsidy of roughly $487,000 under the preliminary numbers), exploring rental income for the depot’s upper floors, and reducing bond asks by applying reserves. He warned that current policy requires maintaining reserves in a range and that under the present draft reserves would fall closer to the low‑teens percentage of the budget.
Next steps and deadlines: staff said they will refine the ambulance proposal and levy‑reduction options and present alternatives to expenditure reductions. Levy numbers must be submitted to the county by March 5; staff targeted an initial budget hearing for April 21 and certification to the state by April 30. Mr. O'Donnell urged council members to request line‑item detail if needed and to meet with staff for clarifying information.
The work session did not adopt any of the proposals; council and staff agreed to further workshops and a more detailed line‑item packet to be circulated by email before the next meeting.
