Osceola talks numbers

Levies and property taxes, golf cart sheds and rec centers, all topics of discussion at the Feb. 11 work session of the Osceola City Council as council started to dig into the Fiscal Year 2027 budget.

Osceola City Administrator Ty Wheeler said work on assembling the budget had begun in November. While the budget looked relatively similar to how it has in years past, Wheeler said some uncertainty lingers with the state legislature.

“I don’t know that we’ll have legislation that is overly impactful to fiscal year ‘27 - there might be a few things... but going to ‘28, there could be... depending on what policy changes end up going forward,” he said.

Levy overview

Prior to delving into the budget, Wheeler gave the council an overview of how Osceola’s tax levy compares to other cities. Of 940 cities in the state, Osceola’s levy rate lands at 266. With an Osceola population of 5,415, Wheeler compared the levy rate to 54 communities in the range of 4,000 to 8,000 people, of which Osceola lands at 32 of 55.

With the urban levy rate, Wheeler explained that those levies are also considered county-wide levies, whereby it counts every property in the county to be levied at that rate. The rural rate is then layered on top of the urban rate to fund rural-only services.

Out of 99 counties, Clarke County’s urban rate ranks ninth, due largely to low rural values.

“Rural value ag land is not market-based valuation, it’s productivity-based valuation… there is an inherent disadvantage in the property tax system for counties in less-productive areas of the state, which is southern Iowa,” he said, as lower rural values put pressure on the collective property values, requiring a high rate to generate revenues to fund county operations.

In terms of actual dollars being levied, Wheeler said Clarke County comes in at 89th of 99. However, due to the low rural values requiring that higher levy rate, urban tax payers end up paying on average $2 more than the state average of $6.27. The amount of tax collected is further broken up to different taxing entities.

“Property taxes are the primary needs of which local governments… below the state fund themselves… as a result, you’re paying a bill and it’s going to half a dozen different designations here… and then it’s cut up several more times,” Wheeler said. “I think… we have continued to strike a balance between trying to be responsible with what we’re requesting of a property tax payer and governance.”

For FY27, Osceola’s 100% taxable valuation increased by 14% before rollbacks or backfills come in. The city can levy against $221,631,000, a 9.2% increase before a state clawback of 3% for a 6.2% increase. Part of that is due to valuation adjustments on existing properties and new properties coming onto the tax roll. The backfill from the state to account for rollbacks this year will be $46,000.

The proposed levy rate for FY27 is 14.36, down from FY26’s rate of 14.77. Wheeler said the main reason the rate came down is that valuation has gone up, meaning dollars generated to fund the proposed budget can be met at a lower levy rate.

Budget snapshot

In looking at the budget, Wheeler said the general fund, which most services operate out of, should see a total increase of about $83,727 from valuation increases. One item added back into the budget that had been taken out last year is the Osceola Public Library’s book budget of about $22,000 to $23,0000. The airport capital match project was taken out of their operating budget as it was included in the bond issuance and will not be put back in. Additional funds were added to the cemetery budget for tree removal.

Some revenues include $64,000 that comes in to the fire department from fees for township fire protection, various rents collected at the airport - hangar, utility reimbursements and hay ground rent - and fuel sales. Anticipated revenue from the sale of cemetery plots was decreased, as Wheeler said they aren’t seeing as many plot sales. Parks and recreation, the aquatic center, garbage collection fees and planning and zoning’s budgets remain mostly the same.

A large expense Wheeler noted was for police department equipment, including new handguns, 10 new in-car computers at about $50,000 and nine bulletproof vests at about $18,000; Osceola Police Chief Marty Duffus said it’s a federal mandate to replace the vests every five years.

The city’s debt service fund has six bonds down from eight last year, and funds from the hotel/motel tax outside of the 56% to streets are going into the general fund for rec center planning per the request of Osceola Mayor Thomas Kedley.

The street department budget, which is funded by the state road use tax and not property taxes, reflects miscellaneous income of $750,000 for the pedestrian bridge crossing over Interstate 35 on West Clay Street. Some capital expenditures for the street department include traffic sensor cameras for approximately $60,000 and requests for a couple of pieces of smaller equipment - a scissor lift for light pole management and a snow box for skid-loader.

Golf cart sheds

v. rec center

When talking about needed repairs to the golf cart sheds at the Osceola Municipal Golf Course, Wheeler stated under revenue grants and capital projects he had put in $500,000, but didn’t know if that would be the case or not.

“We’re going to deal with these golf cart sheds one way or another,” he said.

Kedley disagreed.

“With the $500,000 just placed in there, why can’t we do those things for a recreational complex?” Kedley questioned.

Wheeler explained the sheds needed to be addressed per the city’s insurance company, and he planned to seek a request from Clarke County Development Corporation that it had to be reflected in the budget.

Talks about a rec center have been ongoing for nearly a decade, with plans in the works to raise funds and grants to build such a center for the community back in 2017. Kedley disagreed with the need to provide storage at the course for golf carts, stating the city has an ordinance that allows people to drive their carts around town, including to the course from their homes.

“I don’t agree with it when the whole community is pushing for a rec center. I am very against it,” Kedley said. Earlier in the meeting, he had spoken about the shared vision from the CCDC annual strategic meeting of many community entities to see a rec complex come to fruition.

When questioned what the city should do, Kedley suggested demolishing the golf cart sheds and having people drive their carts. Councilman Mel Miller stated that while he agreed with the need for some sort of recreation center, for many people, including himself, keeping their golf carts at home or building a place to house them would not be a feasible solution. Other members of council expressed concern that if there were no golf cart sheds, golfers would look to courses in other communities that offer that storage amenity.

“There’s always something that gets in the way of the quality-of-life initiative that the community is wanting,” Kedley said. “I would not be doing my due-diligence if I didn’t bring up that concern that people in our community need a recreation center.”

Future considerations

Other topics that were touched on to consider for the future included payroll increases for the police department, implications of a proposed bill that would require 60% voter approval on bonds payable with property taxes, a proposed bill to cap revenue of local governments at 2%, a bill about the use of hotel/motel tax expenditures to go towards tourism, proposed changes to the cemetery perpetual care fund and a suggestion by councilman Dan Hooper to increase councilmember pay.