While it’s about a month later than normal, the Pella City Council held the first of two annual budget workshops Tuesday. For fiscal year 2024, City Administration proposed a plan that would spend $55.7 million – or an increase of 19%, starting this July. This new plan includes a proposal to maintain the current property tax rate at $10.20 per $1,000 of valuation and an increase of water rates of 7%.

After last September’s renewal of the Local Option Sales and Service Tax, the current levy expires on December 31st, and the City of Pella projects approximately $2.37 million in unobligated funds at the end of this year, which they propose can be used on City of Pella park improvements, proposed City Council chambers, an update to the comprehensive plan, and a secure car for Pella Community Ambulance. The other half of the funds, or $1.04 million, would be used to help offset some of the losses expected in property tax revenue and be used for infrastructure projects.

Also included in the discussion was what the City of Pella views as a need to expand partnerships with Marion County, which includes public safety communications upgrades, renewal of the local option sales tax redistribution agreement, finding a solution to fund ambulance service for township residents, and a potential agreement for the Pella indoor recreation center.

At Tuesday’s session, a review of the current employee status was also held. There are 123 full time employees in the City of Pella heading into the next fiscal year, which includes new Pella Fiber, Bos Landen, Pella Ambulance, and Electric positions. Based on a compensation review and annual salary scale adjustment, the City anticipates an increase of 4.8% to total salary costs, or approximately $857,400.

As it relates to the property tax rate, City Administration proposes to maintain the current rate this year, and proposed capital improvement projects will likely cause an increase sometime in the future due to the debt service levy and potential impacts of additional state legislation. Staff recommends developing a financial plan for funding of general fund projects such as parks, government buildings, and streets sometime in the next year before the next budget sessions in 2024. Based on a state formula, while Pella residential assessments for FY 24-25 are projected to increase by 18%, the actual taxes will only increase by 1.4% due to a residential rollback that’s tied to the value of agricultural zoned land.

The Pella City Council budget workshops continue at 6:00 this evening in the Pella Public Safety Complex.