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Newton City staff presents FY 2027 budget, reaffirms $17.10 levy and 25% reserve
Summary
City staff outlined a second draft of Newton City’s FY 2027 budget, confirmed a proposed maximum levy of $17.10 per $1,000 of taxable value, reported a projected general fund balance of about 25% of expenditures, and scheduled public hearings in April on the levy and budget.
Newton City staff presented a second draft of the FY 2027 budget and told the council the proposed maximum levy will remain $17.10 per $1,000 of taxable value.
"Administrator Musler sent out a 2nd draft budget last week," said the staff member presenting the document, and the presentation confirmed a projected general-fund balance of roughly 25.01% of expenditures, which includes a $475,000 equipment reserve intended to support FY 2029 needs. The staff member added that services across the city are expected to remain stable and that planned projects include park and street improvements and stormwater work.
Why 25%? Council members pushed the staff to explain the reserve target. One council member asked, "So can you just walk me through why the number is 25? Why isn't it 10?" The staff member and other members said the 25% benchmark helps the city bridge the gap between June 30 (the fiscal-year balance) and property-tax receipts that arrive in October and April. The staff member noted the city’s cash balance can fall substantially before tax receipts arrive and said the rating agency has signaled concern about lower reserves: "S&P does not want us to go below 25 as a policy," the staff member said, while reminding the council that setting policy is the council’s prerogative.
The presentation included department-level examples of tax impact for homeowners. The staff member said a $225,000 home would pay about $557 per year for police services, roughly $42 for public works, and approximately $119 for library services; the slides also compared the city portion with school and county shares to show how the total tax bill is allocated.
Staff told the council the next procedural steps and deadlines: the council will set a public-hearing date on the maximum-levy proposal on March 2; the levy proposal must be submitted to the Jasper County Auditor by March 5 so the auditor can mail truth-in-taxation notices by March 15. The council will hold a special meeting at 5:30 p.m. on April 6 for the max-levy hearing; the FY 2027 budget public hearing is scheduled for the April 20 regular meeting, and staff aims to file the final budget with the State Department of Management and the Jasper County Auditor by April 30.
On longer-term planning, staff recommended pausing a formal five-year projection until pending state legislation clarifies reassessment timing and other factors the projections would need to incorporate. "Until we really know the legislation, then we can really work on some better five-year projections," the staff member said.
The draft budget also includes funding for an additional firefighter, though council members said that position is on hold pending legislative clarity and completion of the five-year projection work; staff expects to revisit the staffing decision in the June timeframe. Mayor (role-title) framed economic development as the route to lower resident tax burdens, saying the council must pursue strategies that expand the tax base so the burden on homeowners does not grow.
The council accepted the presentation and, with no further substantive questions, moved to adjourn.
