Council hears options for 2025 amended preliminary budget; staff recommends planning around a ~10.7% levy scenario

City finance staff outlined drivers and options for the 2025 amended preliminary budget and asked the council for guidance on a levy ceiling to shape the fall budget process.

Staff recapped key cost drivers embedded in the existing 2025 assumptions: market adjustments and labor contract increases (including police and fire), expected health insurance increases, the planned replenishment of the heritage fund (target approximately $2.8 million), internal service fund inflation (fleet, IT, facilities) and ramp‑down of grant‑funded items (for example, the SAFER grant for fire personnel). Staff noted some values remain unknown, particularly final insurance renewal figures, which could increase the levy requirement further.

To cover additional council priorities and program requests (a second senior planner for the Northwest Area study, a reclassification for a grants manager, continuation of the Health on the Go program previously funded by ARP dollars, a proposed GIS specialist and modest EDA/HRA levy increases), staff estimated the levy impact could rise from the baseline (7.66%) to about 9.77% excluding some discretionary additions and to roughly 10.73% if the full set of items is included. The manager framed an 11% upper discussion point as a practical cap if the council wished to include most items and tolerate some budget risk.

Council members asked how new development and the changing tax base would temper levy impacts and requested staff to show how additional tax capacity from recently completed development would reduce the final property‑tax increase for current residents. Staff said those “feel‑like” effects depend on timing, fiscal disparities and future valuation work and committed to provide calculations with different levy targets.

A councilor asked whether a pool/gym referendum could be placed on the coming November ballot; staff said that statutory deadlines for the November ballot have passed and advised the council that a special election (with additional cost) or waiting until the next citywide election would be required.

Council members generally signaled support for a levy near the staff midpoint: several voices favored the 10.7% scenario with directions for staff to return with contingency modeling that isolates high‑priority items (police market adjustments, Health on the Go, GIS specialist) if insurance or other unknowns increase the levy beyond the chosen cap. The council also asked that final levy and budget choices be presented to the public with the usual November notices showing the property‑tax impacts tied to the selected maximum.

What’s next: staff to return with contingency modeling, tax base/feasibility calculations and prioritized tradeoffs before the council sets the formal levy maximum for public notice.