LEE COUNTY – Lee County Supervisors continue to fine tune their budget strategy for the next fiscal year starting July 1.
As the spring budget filing deadline approaches and the state-required property tax statement being mailed to residents the week of March 16, Supervisors got another look at a modified budget at a workshop Tuesday morning.
The board is still considering several issues, including finalized pay rates and non-legislated, non-profit funding among other budget outliers. But as a whole, the group was happy with how the budget is looking in the final week.
“A lot of what we’re doing is in the background and not seen publicly. We’re working hard at adjusting contracts, getting rid of real estate, reducing payroll…absolutely,” said Board Chair Ginger Knisley.
Supervisor Garry Seyb said the county is being fiscally responsible while reducing its financial footprint.
“The county is managing, I believe, its money well. Supporting the things we need to support while reducing personnel, services, real estate, and our footprint.”
He said, as did Fort Madison City Council members at Wednesday night’s budget meeting, the state is leaving governmental agencies in a lurch when it comes to what could happen this year, or future years.
“Part of the problem we’ve got right now is the state has locked us in as far as actually looking at what we can and can’t do with the budget. We’ve been managing that reduction by virtue of a shell game between general supplemental and the general fund and making a best guess of what we can reduce over a period of time to get where we thought we were going to be in fiscal year 29 (July 1, 2029),” Seyb said.
Current property tax law requires the county to be at a $3.50 general levy by July 1, 2029, but there are multiple bills currently being pushed around the state House and Senate to rescript property tax laws in the state.
The county is current projecting a general fund levy of $12.30/$1,000 of assessed valuation after rollbacks, which is down about 7.5 cents from last year’s rate. Despite the third straight year of reduced levy rates, the county is projecting to collect $1.36 million more in actual dollars - $21.29 million, over the current fiscal year at $19.93 million. That is mostly due to the county’s valuation increasing from $1.74 billion to $1.87 billion assessed.
The last time the county’s levy went up was June 1, 2024 when the general fund levy rate went from $10.32 to $13.53 to offset increases for EMS that wasn’t implemented when the county purchased the ambulance service in 2021.
On June 30 of this year, which is the end of this current fiscal year, the county is projecting a fund balance of $7.26 million. On June 30, 2027, the county is projecting a fund balance of $6.45 million, indicating a reduction in fund balance in the next fiscal year of $809,000, per Budget Director Cindy Renstrom’s projections.
“This budget can withstand, and I can’t believe I’m saying this, but more deficit spending to bring it down a little more. I am not saying we do that,” Seyb said.
Supervisor Chair Ginger Knisley said the budget is a healthy, responsible budget.
Seyb said a $3 million carry over is satisfactory and $4 million carryover is fairly healthy. But the County is still looking at a fund balance of $6.5 million at the end of June 2027. Renstrom said with the price index continuing to climb, the county needs to start looking at a balance higher than $3 million to be comfortable. She said that balance is what the county lives on for July-October until fall tax payments are received.
For fiscal year 2027, which is July 1, 2026-June 30, 2027, Renstrom is projecting revenues from all funds, including taxes, to be at just under $43.9 million while expenditures, or what most people refer to as “the budget” is $45.7 million. That amounts to $1.86 million in deficit spending for the year, which would eat into the county’s current carryover of $7.26 million, leaving the county with the $6.45 million.
Wages were also a big topic of discussion with supervisors indicating they want a study done to evaluate where county employees are as far as wages compared to the market.
The county is budgeting for a 2% across-the-board increase for all employees, despite a negotiated 1.25% boost for union employees.
Fraise said the county negotiated that 1.25%, so why are they looking at 2%?
“We negotiated 1.25 with the unions, so now how does that look to the public when we say 'ok, we negotiated 1.25, but we’re going to give you more',” she asked. “Why do we negotiate then?”
Supervisor Chuck Holmes said the county was trying to keep the compensation increases equal.
Fraise said the county needs to stop comparing departments, and the unions were happy with what they got from the county. She said the county needs to separate union from non-union employees with regards to wages, a move that Lee County Sheriff Elliott Vandenberg agreed with.
Knisley said there is a danger in separating union from non-union employees from the perspective of morale and compared that to “union busting”.
“In my mind, that’s feeling like union busting, actually,” Knisley said.
She said the union negotiated for a minimum cost of living, then, in the budgeting process, the county has that in mind, but they make a decision for the whole county on what the budget can withstand.
“To me, the 1.25 is what we are legally required to pay, but that doesn’t mean that has to be the adjustment for the whole county and we can’t do anything more.”
Seyb said that would create an additional wage race along with what is already happening in the wake of Back the Blue.
“You’re gonna have a race by the union. How do you negotiate in good faith with the union going forward where they settle on anything less than 3%?”
Fraise said that would be their decision and said she was not anti-union and appreciated those workers, but they negotiated and the county should stick with that.
“They came back and said they were willing to do this, but we have the ability to give more. Cost of living increase is 2.8% even at Social Security. If we plan to give less, what do we do with this staffing study?” she said.
Even with the county’s healthy carryover, they will have close to $2 million in a reserve fund that was created out of the fines charged under the automated traffic control devices on Hwy. 218.
“Many people think the county is broke, but the county is not broke,” Seyb said.
But he said until the rules are set at the state level, the county will likely deficit spend in the next budget year, as well.
The board also discussed a raise for supervisors. At past budget meetings this year, they recommended moving to $42,575 but Holmes bristled at a raise that large from $29,125 current. The chairman gets an extra $2,500.
No decision was made on that issue.
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