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North Liberty staff reports FY27 operating shortfall; proposes using FY25 surplus
Summary
City staff told the council on Jan. 20 that the proposed FY2027 operating budget shows a roughly $115,000 deficit that would be covered from the FY2025 surplus, leaving reserves around 35%. Staff also warned that a 2023 state tax law has reduced levy-driven revenue growth.
City staff presented the proposed FY2027 operating budget at a special North Liberty City Council session on Jan. 20, saying the plan shows an operating deficit of about $115,000 that staff propose to fund from a FY2025 surplus.
"At the end of the day, you can see on this summary slide that we have a deficit in the FY27 budget of about 115,000," Ryan told the council during the general-fund review. He said the city has roughly $1.6 million in FY25 surplus that could be reallocated while keeping the general-fund reserve near 35%.
Ryan also stressed the revenue impact of a 2023 state property-tax law. He said county valuations rose about 5.25% but levy-driven revenue will increase only about 3.22% because of the law’s limits, reducing the city's ability to capture full valuation growth. "You might think because we saw our valuations go up 5.25 percent, we'd see revenue go up as much. And that's just not the case, with the new tax law," he said.
Council members asked how staff would cover unplanned requests that may arise mid‑year; Ryan said the options are budget amendment or finding alternate revenue. The council scheduled a follow-up session next week to review capital projects and the reserve policy in more detail.
