Perry City council adopts certified tax rate, pursues budget fixes to avoid property tax hike

PERRY CITY — At a June 11 work session, Perry City officials reviewed FY2027 tax-rate options and agreed to adopt the newly certified tax rate while pursuing internal budget changes to avoid a property tax increase.

City Recorder and Finance Director Shanna Johnson told the council the FY2027 certified tax rate (CTR) is 0.001859, up from the prior year’s CTR of 0.001801 due to a modest decline in assessed values. Under the certified rate the city would receive about $1,160,102; Johnson said staff estimated a proposed higher rate of 0.002122 would generate roughly $164,054 in additional revenue and would trigger a truth-in-taxation hearing on Aug. 11, 2026 at 7:15 p.m.

The proposed extra revenue in staff materials was allocated to three items: $28,600 for police compensation and IT support, $10,454 for administration (IT and legal counsel), and $125,000 to fully cover an increased fire services contract.

Police Chief Scott Hancey presented an alternative package of staffing and compensation changes intended to avoid the tax increase. His recommendations included removing the budgeted ninth officer (citing an officer returning from military leave and a coincident departure), increasing tenure-based quarterly bonuses by 50% in lieu of market-based raises, and eliminating the shift differential. Hancey said those changes, together with retirement-adjustment savings and funding the $70,091 server upgrade from fund balance rather than the operating budget, would yield an estimated $173,000–$192,000 in savings—enough to cover the identified revenue gap.

Council Member Blake Ostler pressed staff on the optics of proposing a double-digit percentage increase while the city’s fund balance appears healthy, saying constituents "seeing substantial savings alongside a proposed 14.15% tax increase would reasonably ask how those two facts could be reconciled." Johnson responded that the council could cut budgets, use fund balance, or proceed with the proposed rate, and that "there is no wrong answer." Council Member Nathan Tueller said exhaustively pursuing internal alternatives and being transparent with residents would be most responsible.

Johnson noted the FY2026 fund balance was trending near 38%, above the 35% policy target, which staff said would allow one-time transfers to capital accounts (including a 1200 West North road grant match, a gun-range project, a public works facility, a first-responders vehicle fund, and Phase 3 of the Mountain View Bike Park) while maintaining a healthy general fund reserve range.

Council members generally supported funding the server from reserves for this cycle and creating a recurring annual capital contribution (about $13,000 per year, staff suggested) to smooth future IT replacements. Johnson said she had prepared resolutions for both adopting the certified rate and for pursuing the higher rate; the council directed staff to proceed with adopting the certified tax rate and the alternative staffing and capital funding approach, with the option to bring the higher-rate resolution to a regular meeting if circumstances change.

The work session concluded without a formal vote; staff will present the resolution(s) for formal action during the regular meeting schedule.

Next procedural steps: if council pursues the higher rate, a truth-in-taxation hearing would be held Aug. 11, 2026 at 7:15 p.m., and a final property tax rate decision must be made before Sept. 1, 2026.