City rolls out 2026 budget

ALTERNATIVES

Staff and our city council have had discussions in efficiencies and using our resources wisely. The future will require that we must look at alternative revenue streams to sustain services and facilities for our community.”

Laura Liegois, FM City Manager

FORT MADISON – The City of Fort Madison is finding its way around property tax caps set up by Iowa legislation that is creating municipal and county shortfalls around the state.
House file 718 was signed into law in 2023 with an aim to reduce property tax burdens on Iowans, while holding local governments more accountable for their spending.
Fort Madison City Manager Laura Liegois told legislators in January that the legislation is creating budget crises across the state and that shouldn’t be required for local governments to operate efficiently.
“As we understand, our residents do feel the burden of property taxes, it is how the system is set up to ensure that streets, public safety, and quality of life are maintained in our communities,” Liegois wrote in a cover letter to Fort Madison City Council prior to Tuesday’s special budget hearing at City Hall.
The proposed 2026 fiscal year budget that goes into effect July 1, has revenues totaling $33,204,380 while expenses are projected at $34,064,960, for an estimated balanced budget.
If the city holds to that budget, they will end with a total fund balance of $15.96 million on June 30, 2026, the end of the fiscal year.
“As I explained in many conversations these past few months, there should not be a budget crisis to operate efficiently,” she wrote.
“Staff and our city council have had discussions in efficiencies and using our resources wisely. The future will require that we must look at alternative revenue streams to sustain services and facilities for our community.”
The property tax ask for fiscal year 2026 for the city will be fairly static with a 3-cent reduction at $18.24/$1,000 of assessed valuation. That number is comprised of an $8.21 general fund levy; $3.39 for debt service; 38 cents for tort liability insurance, and $6.26 for employee benefits.  The employee benefit levy makes up the largest increase at 26.5 cents. The debt service levy has dropped 32 cents as some of the city’s debt falls off in 2026.
By city’s general fund, which doesn’t include enterprise funds such as revenue-generating water and sewer departments, is expected to generate $7,703,870 while expenses are projected at $7,742,100 which represents deficit spending of about $29,000 and reduces the fund balance to $1,058,032, down from $1,096,263 projected at the end of the current fiscal year.
The police department will carry a $3 million budget for the first time ever and that will still leave a request for an additional officer vacant. The budget does include two new vehicles as none were replaced in the current budget.
The fire department budget shows expenses of $2,189,410 compared to $2,090,710 in the current year. The increase is mostly for 5% wage increases negotiated in a union contract. The new fire station isn’t included in the budget, but the city is moving forward with resources, design, and obtaining a general obligation bond.
Other city fund budgets are as follows:
•Planning and Zoning - $321,050 (up $20,310)
•Library - $379,480 (up $8,220)
•Parks - $429,340 (up $26,540)
•Swimming Pool - $86,000 (down $1,000)
•Cemetery - $207,760 (up $22,910)
•Amtrak Depot - $23,500 (up $2,000)
•Policy and Administration, which includes City Manager, City Clerk, Finance director, City Council, and Mayor - $1,085,420 (up $55,720) This also funds the city’s contribution to Lee County Economic Development, which will stay at $20,000 despite a $50,000 request for the group’s five-year capital campaign.
•Road Use Tax Fund, which assists with upkeep of roads. The tax is made up of fuel taxes and a portion of vehicle registrations, federal grants, and some state fees. - $1,688,540 (up $156,000). Revenues in this fund are projected to increase $20,000 to $1,503,640
Enterprise funds include the following:
•Wastewater: Revenue - $3,965,300, Expenses - $3,476,750, Ending balance $1,807,528
•Water: Revenue - $3,819,000 (up $70,000), Expenses - $4,255,300 (up $192,000), Ending balance - $1,719,886 (down $436,300).
•Solid Waste: Revenue - $1,082,250 (even), Expenses - $1,100,850 (up $63,000), Ending balance $1,056,367 (down $18,600)
•Airport: Revenues - $402,800 (up $251,200), Expenses - $502,270 (up $415,290), Ending balance – ($134,017) (down $104,600)