T-R PHOTO BY ROBERT MAHARRY City of Marshalltown Finance Director Diana Steiner addresses the council during a budget workshop at city hall on Monday evening.

Although there was frustration in the room about the lack of taxable valuation information currently available — one of the biggest pieces of the puzzle come budget season — the Marshalltown city council met for about an hour on Monday night to hold initial discussions on the budget it will submit to the county and state within the next few months.

“The theme to this budget is uncertainty,” City Administrator Joe Gaa said.

During the meeting Monday, Gaa dug into several key areas of focus, including the consolidation of special levies as a result of HF718, which benefit the public library, the municipal band, the Marshalltown Arts and Civic Center (MACC) and an emergency fund. The library and emergency fund are the biggest beneficiaries of the levies, receiving $250,897 each annually, while the MACC currently receives $100,000 and the band receives about $9,000.

He then presented a pair of options to deal with the change as the first consolidated/reduced levy will go into effect in Fiscal Year 2025, which begins on July 1. The first would be an even reduction that would essentially halve the contributions to each entity, while the second would prioritize essential city services and only leave about $60,000 for the library, nothing for the MACC and nothing for the band.

“This is a devastating option,” Gaa said.

Another looming issue is the phasing out of the state backfill to offset commercial and property tax reductions, which will be reduced by $48,000 annually until it goes away in FY2029. In FY2022, the city received $382,000 in backfill money.

On top of these changes in state laws, there are the more routine challenges of setting city staffing levels, paying for union wage increases, the ever-rising cost of employee health insurance, Alliant’s proposed 10 percent utility increase, and LynchDallas raising its fees for city attorney services. Gaa also raised the possibility of modifying the formula for how the hotel/motel tax revenues are disbursed but added that he did not feel the current fiscal year would be the right time to “rock the boat.”

Two frequent topics of conversation over the last few years and during the most recent election cycle were code enforcement and the condition of the city’s roads, and Gaa presented some ideas on how to address them — with one caveat.

“Quite frankly, residential street maintenance, we don’t have enough money and we’ll have enough money to do it right and quickly,” he said. “We can probably come up with a plan. We don’t have enough money to fund it, but it’s something to get started… Can we scrounge together a few dollars to start looking at improving our residential street maintenance?”

As he discussed the various funds and taxes that help to fund the city government, Gaa said he felt the council should balance the budget a little more this year and questioned whether annually borrowing about $10 million for capital projects was a sustainable path.

He noted the important role Local Option Sales Tax (LOST) plays in doing so. LOST, which is currently designated 78 percent for property tax relief and 22 percent for council designated uses, is up for a renewal vote on March 5 with the formula slightly modified to 75 percent property tax relief and 25 percent council designated uses.

The final area to examine was the Capital Improvement Plan (CIP) and which projects were considered top priorities as opposed to those that could be put on the backburner and pushed back to a later date. City Finance Director Diana Steiner then took over the floor and reviewed some of the finer details of the plan along with LOST uses, including the Make Marshalltown Home incentive program in partnership with the Marshalltown Area Chamber of Commerce. She said participation has been limited thus far, but Chamber President/CEO John Hall has at least 10 homes in the works to receive the incentive.

Councilor Gary Thompson opined that while the incentive was well-intentioned, it may already be “archaic,” and he felt a standard three-year tax abatement would be a better deal for homebuyers.

“I don’t wanna make decisions tonight, but we need to look at every dollar we’re allocating starting next week,” he said.

While the valuation numbers are supposed to be submitted to cities by Jan. 1, Marshall County Auditor/Recorder Nan Benson did tell the T-R that her office is still working through some software issues to finalize them and ensure they are correct. Gaa conceded that it would be difficult to have a clear picture without those numbers available but felt it was important to make use of the limited time the council has to finalize its budget.

Before adjournment, Thompson suggested holding three or four more special meetings to get to where they need to be.

“Whatever it takes, right? We’ve gotta do this, so if we don’t get the head start we thought we were gonna get, we just take it as it comes and work through it,” he said.

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Contact Robert Maharry

at 641-753-6611 ext. 255 or

rmaharry@timesrepublican.com.