West Branch reviews draft FY27 budget with proposed levy, LOST reallocation and 4% wage increase

City Administrator Adam Kofoed presented a draft FY27 budget at a Feb. 9 West Branch City Council work session that models a 16% increase on the city’s overall levy to help cover rising tort liability insurance costs and outlines proposed reallocations and capital spending across several enterprise and reserve funds.

Kofoed walked the council through revenue sources and fund accounting, saying West Branch relies heavily on property tax, utility charges and interfund transfers given the city’s current size and growth. He told the council the draft assumes the solid waste fund will continue unchanged but with a 3% annual increase in revenues and expenditures.

The draft budget reflects several notable assumptions. Kofoed said it includes an estimated 16% increase on the levy to address insurance inflation. He also described adjustments to benefits assumptions—stating an "11% deduction in FICA" and a "100% decrease in group insurance" in the document—which he said would reduce the illustrative property tax burden by about $47 for a home assessed at $110,000. Council members agreed further review of those assumptions is needed.

On LOST (Local Option Sales Tax), Kofoed noted that state/local changes effective after Jan. 1, 2025 expanded allowable uses from parks and recreation to include public safety and infrastructure. He said the council is considering using more than $400,000 currently earmarked for Parks & Rec to pay down the SRF loan used to build Cubby Park and that the breakdown of those transfers will be discussed further.

Kofoed outlined debt-service funding, saying $316,000 from a dedicated fund and $567,000 from other sources (sewer, LOST, water and similar funds) are used semiannually to meet bond payments. Capital improvement funds would be held as reserves for future projects. He also reported TIF revenues are down this year because a developer’s TIF period ended; some TIF-related dollars are being redirected toward items such as funding for a new fire chief and bond obligations.

Public Works Director Matt Goodale described operational steps to control road-maintenance costs, including blending pretreated salt with sand to reduce the salt budget. Kofoed said Road Use Tax expenses are expected to rise about 3%, driven by salt, nuisance maintenance and vehicle set-asides.

In enterprise funds, the draft keeps the water budget largely in line with prior years but includes minor plant repairs, a $138,000 transfer to bond payments, purchases of new meters to serve growth and replace older meters, continuation of the tower-maintenance contract and about $75,000 set for utilities and pipe replacements. The sewer budget is projected to mirror previous years with money earmarked for utilities and maintenance; Kofoed said staff is exploring the purchase of a used john boat or pontoon to service lagoon air hoses and that funds will be set aside for equipment liability and vehicle replacement.

For stormwater, Kofoed advised the council the draft proposes using $100,000 from the stormwater fund to cover an overage on the Wapsie Creek widening project. For personnel costs, the draft models an overall wage adjustment of about 4% for city employees (1% merit plus 3% cost-of-living).

No formal budget votes were taken at the work session; Kofoed said further discussion will take place on several assumptions and the proposed allocation of LOST funds. Councilmember Colton Miller moved to adjourn; Chantry Noel seconded. The motion carried on a voice vote and the session ended at 7:05 p.m.