City to start deeper budget dive

FORT MADISON – Fort Madison city officials are looking to start discussions already on the 2027 fiscal year budget due to changes in funding streams impacting the city.
City Manager Laura Liegois and City Finance Director Peggy Steffensmeier will be leading a discussion at Tuesday’s regular council meeting about future city budgets.
The discussion Tuesday is what the two called a starting point in a report to the Fort Madison City Council.
“The past two fiscal year budgets have been affected by Iowa legislation with House File 718, which removed emergency tax levels and changed the property taxes that all cities receive,” the report read.
“As we have seen, this has had impacts on our budgets for (Fiscal year) 2025 and 2026. During this current year’s legislative session, there have been four bills presented on changing how property taxes are figured and directed to local government(s).”
The 2025 Iowa legislative session has gone into overtime as legislators grapple with, among other things, property tax reform. Some legislators have indicated they are comfortable with moving the discussion into the next session, while some are holding the session open while eminent domain issues around carbon pipelines are worked out.
Discussion points for the fiscal year include:
• franchise fee increases to 3% which would generate about $537,000 in electrical revenue fees, and $125,000 in gas franchise fee revenue.
• cost of services – what services does the city provide that should be charged to residents or have fees adjusted for services.
• review of expenses – what services does the city provide and should they continue doing them internally, contract them out, or cease the service.
• deeper dive into departments where additional savings to help balance the budget could be realized.
Revenues are projected to drop slightly in the 2026-27 fiscal budget year about $45,000 to $7.65 million from $7.70 million. The 3-year projection shows revenues under current funding streams at $7.86 million in 2027-28 and $8.12 million in 2028-29.
However, projected expenses show substantial increases with a 2026-27 figure of $8.22 million, $8.41 million in 2027-28, and $8.76 million in 2028-29. All three years show deficit spending of more than a half a million each year. The city is projecting $38,000 in deficit spending in the upcoming fiscal year. The current budget year is projected at $422,000 in deficit spending.
The city’s police department budget shows an increase in projected expenses of 63% when comparing the current budget to the 2028-29 projections. The fire fund is projected to increase 36% in the same comparison.

9:16 p.m. - This story was corrected to show the police department is showing a 63% increase and the fire fund at 36%.