FORT MADISON - Fort Madison city officials will begin to mull over a proposed $7.06 million 2023/24 budget on Tuesday.
The standout portion of the budget is the proposed increase in the city's mil levy of $2.735/$1,000 of assessed valuation.
Last year the levy was set at $15.072 and this year, City Manager David Varley is projecting a levy rate of $17.808. The increase, he said, is due to the general obligation bond that was issued to finish the Hwy. 61 project.
Varley is projecting the city to end up with $1.1 million in the general fund, which is very close to the $1.096 million currently expected for the revised 2022-23 budget which ends June 30.
The city's levy is comprised of among other things, the general levy at $8.10, which is the maximum allowable by state code.
The debt service portion of the levy is the part showing the substantial increase this year. In 2022-23's budget, that number was $1.636/$1,000 and the proposed budget includes a debt service levy of $3.703. That represents $2.07 of the $2.74 increase.
The city isn't collecting a local emergency management levy as it hasn't for the past two years due to a change in funding the Lee County Emergency Management Agency budget.
The employee benefits levy will increase by approximately .67/$1,000 to $5.511 to accommodate for the rising costs of employee benefits including IPERS payments.
The emergency tax levy of .27/$1,000 is a levy that can only be accessed if the city is maxed out in the general levy. There is also a tort liability that helps cover the city's general liability insurance and is set at .22/$1,000 and cannot exceed the amount needed for the insurance premium.
Varley said in a report to the council that expenditures for the proposed budget are decreasing, but most departments will see inflationary increases. The one-time expense of the James Block building, which will not be incurred again this year.
"Expenditures in the General Fund are being impacted by the very high inflation rate. This has caused increases in several of our line-item accounts, such as fuel and other supplies," Varley wrote in his report.
"When expenses increase like this, we try to find savings in other accounts to offset the increases. This can be difficult however, when most of our expenses are being affected by the current economic situation."
The current budget with revised figures shows deficit spending in 2022-23 of $182,235, mostly attributable to the James Block building repairs.
Varley wrote the proposed budget is projected to have a $5,180 surplus in the general fund.
The new city tourism board is being funded at $75,000 in the next budget and $90,000 in year two which will tug at Hotel/Motel tax funds, but Varley said that fund is rebounding and should be able to handle the additional expense as well as current funding responsibilities, but will result in $41,600 of fund balance spending, leaving an ending balance of $7,074.
The city's $6 million quality of life bond, is also expected to be depleted by the end of the upcoming fiscal year.
Another budget session has been tentatively set for Jan. 31.
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