Altoona Budget Committee Meeting: TID #3 Closure, Capital Budget, and Debt Service — August 28, 2025

The Altoona Budget Committee met on August 28, 2025, in Council Chambers at Altoona City Hall to review the impact of TID #3's closure on future mill rates, the proposed 2026 capital budget, and 2026 debt service plans. Mayor Brendan Pratt presided; Councilmembers Timothy Lima, Bruce Thielen, Matthew Bjorn, and Susie Zilmer were present, and Sue Rowe was absent. City staff, Finance Committee President Mark Willer, and Financial Advisor Sean Lentz (listed on the agenda; the transcript calls him Sean Lance/Sean Lynch with Ellers Associates) participated. The meeting was informational, and no formal budget votes were taken.

Discussion Items

TID #3 Closure Impact and Future Mill Rates

• Sean Lentz described the TID #3 closure as an “opportunity situation”: roughly $400 million in equalized value shifts from the closed TID into the city’s general tax base.
• The city will receive about $607,000 in ongoing levy-limit capacity and a one-time payment of roughly $1 million (described as approximately $1.1 million) in 2026.
• The city must keep its equalized mill rate at or above 5 mills to remain eligible for the $100,000 annual Expenditure Restraint Program payment.
• 2025 baseline figures cited: operating levy $2.75 million; debt service levy $1.927 million; total city levy $4.678 million; equalized value excluding TIDs about $890 million; equalized mill rate $5.26 per $1,000.
• The preliminary model would raise the operating levy to about $3.385 million and expand the tax base to about $1.34 billion, producing an estimated mill rate of $5.08 per $1,000 — slightly below the 2025 rate. The transcript appears to state the debt levy rises to “$9.4 million,” but the same passage gives a $6.8 million total levy, suggesting a transcription error.
• The model assumes future debt issues in 2027 and 2029, including large legacy projects such as a library and fire facility, while keeping the mill rate near 5 mills.
• General obligation debt capacity was reported as strong, well below state maximums.

2026 Debt Service Budgets

• Staff proposed borrowing about $6.115 million to reimburse the city for already-approved 2025 capital projects and to pre-fund 2026 capital projects.
• This would avoid a separate 2026 borrowing; the next borrowing is planned for 2027.
• Proposed repayment uses larger levy-supported payments in 2026 and 2027, then lower payments; water, sewer, and stormwater portions would be repaid by utility revenues over 10 years.
• The projected true interest rate was about 3.8% fixed for 10 years, estimated at half a percentage point above current market rates.
• Councilmember Lima questioned borrowing for two years at a time and the increase in city spending; Mayor Pratt cautioned against treating TID closure funds as a “windfall” for new spending and emphasized distinguishing needs from wants.
• Other council and staff discussion noted deferred infrastructure, the fire/EMS study recommendation to add about $500,000 per year in staffing, and the importance of stable taxes while maintaining services.

2026 Capital Budget and Five-Year CIP

• City Engineer Christian Hubert reviewed the five-year street plan: highlighted streets are anticipated full reconstructs or pavement replacements; parenthesized “PR” denotes pavement replacement only.
• Streets work is driven largely by lead-service replacement needs through 2036; the city has more reconstructs than can fit in the five-year window under the roughly $2 million annual levy capital limit.
• Staff described a low-cost AI/image-detection pavement assessment tool (about $5,000 per year) to be mounted in a street sweeper, providing pavement ratings and heat maps.
• The proposed 2026 capital budget totals about $4.3 million; the five-year CIP totals about $42 million. Project narratives were provided in a roughly 100-page PDF.
• Councilmember Lima questioned the city-provided portable baseball training backstop ($10,000) while the city does not provide scoreboards, press boxes, or bleachers. Staff and other members described it as a long-standing partnership and safety/field-maintenance item.

Key Outcomes

• No budget figures were formally approved; the 2026 capital and debt service plans remain preliminary.
• Staff indicated they will continue developing the budgets using the presented framework and will seek council guidance at upcoming meetings.
• Upcoming schedule: water, sewer, and stormwater budgets in about one month; library budget and general-fund first draft on October 9; final general-fund draft and affordable-housing fund budget on November 6; public budget hearing on November 20.
• The meeting adjourned by unanimous voice vote after a motion and second.