Altoona Budget Committee Reviews 2025 Final Budgets and Mill Rate – November 21, 2024

The Altoona Budget Committee met at 3:30 p.m. on Thursday, November 21, 2024, in Council Chambers at Altoona City Hall to review the final 2025 proposed budgets and the 2025 mill rate. Mayor Brendan Pratt, Councilmembers Timothy Lima, Matthew Beerin, and Susan Rowe were present; Councilmembers Caitlin Leopold and Dale Stewart were absent. Finance Director Tina Nelson presented the budget materials, and the committee unanimously recommended the final 2025 budget rates to the Common Council.

Discussion Items

• 2025 Budget and Mill Rate: Nelson reported that the 2025 proposed assessed mill rate is 5.47 and the equalized mill rate is 5.40. The total tax levy for the four tax levy funds is approximately $4.8 million. The committee had previously agreed to keep the average residential property tax bill flat, which allowed an additional $146,560 in levy.
• Market Update: The 2024 market update showed residential property values increased by an average of 13.52% and commercial property values increased by 19.03%. The city's assessed value is at 98.63% of equalized value.
• Tax Levy Funds: The General Fund budget is $8.5 million with a $3.1 million tax levy. Nelson noted intergovernmental revenues include state shared revenue and the new sales tax distribution; the city received roughly $300,000 more last year and expects about $7,000 more this year, while transportation aid decreased. The Library Fund requested slightly less than the prior year because county revenues increased and some expenses decreased. The Debt Service Fund pays all debt payments; next year's debt payments will drop significantly because the city is paying $4.5 million in tax increment district debt. Capital projects are funded through borrowing, not a capital tax levy.
• Tax Increment Districts: TID No. 3 (River Prairie) was created in 2001, has a current value of $392,555,700, and its final revenue collection year is 2025. After paying all debts, the city estimates $5.2 million will be left for distribution to taxing jurisdictions, with the City of Altoona estimated to receive 34.54% (about $1.7 million) in 2026. TID No. 3 covers approximately 29.81% of the city. The city must adopt a resolution before April 15, 2025, to close the TID and extend it for one year to deposit $6.2 million into the new Affordable Housing Fund.
• TID No. 4: Current value is $34,942,900. It helped pay $1.5 million for Wells 8 and 9 and the U.S. Highway 12 project. It could close in 2028, two years before its 2029 deadline.
• Affordable Housing Fund: The new fund (835) currently has $241,000 and is budgeted to receive $6.2 million from TID No. 3. The budget also funds half of a new full-time position to develop affordable housing programs and support grant writing, with the other half allocated from utilities and the General Fund.
• Utilities: The city now has more than 4,000 utility billing accounts. The water utility completed a rate case approved June 17, 2024, with a 7.7% rate of return, and Wells 8 and 9 came online. The sewer utility sends waste to the City of Eau Claire; the 2025 rate will increase 16%, from $523 to $606, and is budgeted without increasing customer sewer rates. Finance Director Nelson said city staff disagree with Eau Claire's rate methodology and have sent a letter; if unresolved, the process moves to manager meetings and then mediation. Members noted the city currently pays for 16% capacity while average flow is about 0.6 million gallons per day against 1.8 million gallons per day of capacity. The stormwater utility's rates have not been raised for some time, and staff will review accounts and rates in 2025 to ensure cost recovery.
• Capital Projects and Staffing: The 2025 General Fund capital program remains around $1 million per year for street work. The Seventh Street West reconstruction project totals $789,000, with $205,000 in grant funds; extra savings were shifted to pavement preservation. The budget includes $55,000 for a shade structure and multi-purpose surface at the Container Park, with construction planned for spring. The budget adds a full-time police supervisor position, a full-time affordable housing and grants coordinator, a part-time utility and accounting position, upgrades the building inspector to building official, and uses a 2.5% wage table increase.
• Sample Tax Bills: Nelson presented sample bills for properties that increased by the average 13.52%, from $320,000 to $363,000. For the Altoona School District sample, the city's local levy portion stayed flat; the county portion decreased by $139 and other portions decreased, producing an overall decrease of about $148. For a sample in the Eau Claire School District, the overall bill decreased by $6.41. A commercial property sample showed a local levy increase of $96.51 and an overall increase of $89.08.
• Finance Committee Member Mark Willer advised that the one-time TID surplus should be used for one-time or revenue-generating investments, and suggested using it to leverage grants and support the Affordable Housing Fund.

Key Outcomes

• The committee voted unanimously to recommend the final 2025 budget and mill rates to the Common Council.
• The next step is a public hearing at the Common Council meeting, followed by council adoption of the budget resolution.
• The city must adopt a resolution for TID No. 3 closure and the affordable housing fund extension before April 15, 2025.
• The city will continue discussions with the City of Eau Claire over the disputed sewer rate methodology.
• The meeting adjourned at 5:21 p.m.