The Marshalltown city council had plenty of budget matters to cover during Monday night’s special meeting, and in addition to discussions on the sanitary sewer and transit funds, Public Works Director Heather Thomas led a conversation on the stormwater and compost funds before handing the microphone off to Parks and Recreation Director Geoff Hubbard.

Similar to her recommendations on transit, Thomas suggested $163,000 in expense reductions and a rate increase that would generate $66,000 in revenue to help balance the budget. In breaking down the cuts, she said they would simply drive vehicles longer and delay replacement purchases. Large projects at the city’s two large lift stations — one at Riverview Park and one on 18th Avenue — have also been delayed for the time being, but she said some stormwater revenue bonds in contingency from the 4th and Meadow Lane project could be put toward the 18th Avenue project.

While acknowledging that increasing revenue is “a touchy subject” she doesn’t take lightly at all, Thomas noted the results of a previous study encouraging the city to raise its stormwater rates gradually over five years — three percent the first year, five percent the second year, 10 percent the third year and 40 percent the fourth year.

“For various reasons, those were never approved through council in the idea that five percent is where we wanted to cap an annual increase on any of our utilities,” she said. “I am asking for your guys’ approval on budgeting for a five percent increase on the stormwater utility fee.”

As it stands now, the city’s rate of $4 per equivalent residential unit (ERU) has not been increased since fiscal year 2017. For a household living on less than two acres, her proposed adjustment would mean paying about $2.40 more a year.

With the floor opened up to questions, Councilor Gary Thompson didn’t feel the increase was enough, and she said that while she didn’t disagree with him, it would at least get them through the upcoming fiscal year.

“There’s enough other things going on right now that if we can do this to get us through fiscal year 25, we’ll have an additional time this fall to do a multiyear study to figure out what we need to do year after year,” she said.

Councilor Barry Kell encouraged the rest of the council to have “courage” in heeding the results of the study in reference to the fact that the previous recommendations were not implemented, and fellow Councilor Greg Nichols added that in the end, the city would have to pay for it one way or another.

“This is something that we can’t let fall apart,” Mayor Pro Tem Mike Ladehoff said.

Thompson asked for the input of other councilors, and Ladehoff said he felt a bare minimum of a five percent increase was necessary while reiterating Kell’s call for courage once a study is completed. Kell then motioned to follow staff’s recommendation and go with a five percent increase for now, and it passed by a unanimous 6-0 vote with Councilor Jeff Schneider absent.

The conversation then shifted to the city’s compost facility, and Thomas sought guidance on hours of operation for the upcoming year. Currently, she estimated about $140,000 worth of material onsite was what it would take to have it contracted to be chipped, crowned, hauled and disposed of, but she said she was not proposing to do that.

Thomas felt that if they operated the facility with the same hours — only open Friday, Saturday and Sunday — as they had after making changes in 2023, they would be fine financially, but a push to reopen it more days could jeopardize it. Last year, she said, they probably operated at a $15,000 loss, but that was nonetheless an improvement on years past.

Ladehoff told Thomas he was OK with following her recommendation, but he didn’t feel the effort to run the facility “like a business” had worked thus far.

“I don’t think that people should be paying $20 to have, you know, half a pickup load of tree branches and that kind of thing coming in and have limited hours like we’re doing here,” he said. “This can’t be handled tonight because I know there are legal issues that you have to put together and all that, but as one of the people who voted no to do the tree fee or whatever people wanna call it, I’m changing my mind.”

He added that he felt it should be brought back up for more discussion since two new councilors have been elected. Thompson had a question for Thomas on what caused the decline in commercial customers — the reduced hours or the fee changes.

She responded that it was probably both with the limited hours playing a slightly larger role, but Thomas felt getting the contractors out was a benefit to everyone as most other municipalities do not allow them to utilize their facilities. If the council does choose to open it back up to them, Thomas said she and Street Superintendent Rick Legg would recommend a higher rate for commercial customers.

Thompson also wondered why finished goods weren’t “a huge profit center” for the city and being sold to the county.

“Are other cities having more success selling their finished goods than we are? Is there something we’re missing on the back end of all this? And if we’re gonna pay $140,000 to shred it, how much is a shredder? If we’re paying $140,000 a year to shred stuff, we should buy our own shredder,” Thompson said.

Legg responded that a shredder would cost $1 million. Thomas then told the council she would be looking for a good analysis of how much the city should be selling its finished compost, and she also noted an “advantageous” change not to charge individuals who haul out firewood and wood chipped material.

Thompson then indicated that he would like to see residential use free and commercial users charged a fee with the compost facility operating as a service and figuring out how to make money selling the compost on the back end.

“The amount of weed and grass clippings that we get in is not a large quantity, and so we have a limited amount of product to sell. At this point, we’ve been able to sell all the product that we make from a compost perspective. We just don’t have a large quantity,” Thomas said.

Councilor Greg Nichols motioned to go with Thomas’s recommendation to chip only $60,000 of material to make space, and it passed by a unanimous vote.

The final enterprise fund discussion of the night centered around the concession fund for the aquatic center, and Director Geoff Hubbard said his predecessor had taken money from the fund to pay for a painting project at the pool because there wasn’t enough in the budget at the time. He’s spent the last several years trying to get the fund back in the black but said it has been difficult and taken longer than he hoped it would.

Hubbard has received an anonymous $50,000 donation the last few years to help out park projects, and he said he would like to put $15,000 of it into the concession stand fund and hopefully be out of the budget hole by the end of FY25.

Thompson asked if it would be legal to use Local Option Sales Tax (LOST) to pay down the debt of $25,565.37, and when he was told that it was, he suggested doing so and made a formal motion to let the aquatic center “at least have a fighting chance” moving forward.

It passed by a 6-0 vote. In a related discussion afterward, Ladehoff noted that most aquatic centers don’t cover their own costs but are generally seen as a necessary community asset.

Hubbard pointed to his previous jobs in Sioux City and Council Bluffs and said that in the former, they generally recovered about 65 to 70 percent of their costs across five pools, and in the latter, the figure was about 85 percent across two pools.

“I’ve never heard of a pool that makes money in Iowa,” Hubbard said. “We would love to break even. We shoot for everything we can. We’re, I think, being very fiscally responsible with the amount of staff we have working every day. We’ve looked at changing hours of operation to do so. This past year, we looked really hard at the concession stand. We were selling pizzas and pretzels and a lot of things that took people to make vs. just grab on the shelf and hand to somebody. So we’ve kind of revamped the menu at the aquatic center. I think we’re doing a lot (that) we can.”

He added that staffing has been a consistent struggle, but some proposed changes in when school can start could be beneficial if he can find kids who aren’t too busy with other activities and want to work at the pool. Hubbard appreciated Thompson’s motion for “a clean slate” related to the past date and told the council he wouldn’t let them down.