Clinton City holds pre-budget briefing as health costs and state tax proposals pressure local revenue

Clinton — City staff on Tuesday gave the Clinton City Council a wide-ranging pre-budget briefing that laid out how the city builds its budget, where revenue comes from, and which pressures could force policy choices this spring.

At the center of the presentation was an explanation of the two main fund types. "We have two major types of funds: the general fund and proprietary funds," the meeting chair said, noting the general fund covers police, fire, parks and rec, library and city hall while proprietary funds cover operations such as wastewater, solid waste, the airport and marina.

Staff said the general fund is about $25,000,000 of an overall $65 million-plus budget and that roughly $15,000,000 of that general fund is expected to be funded by property taxes; other revenue streams include franchise fees, local option sales tax and service fees. "Not all of the general fund is funded by property taxes," a city staff member said, emphasizing the mix of revenues that offset property-tax reliance.

Officials flagged two immediate pressures. First, health‑care costs rose about 22% year‑over‑year, a trend staff said will require decisions on employee premium shares and plan design. "Health care went up 22% this year," the staff member told the council and proposed several courses of action, including phased employee contribution increases or caps on employer exposure.

Second, pending state legislation would change key property-tax and homestead rules. Staff presented scenarios showing state proposals could strip about $731,900 (using last year’s levy) up to roughly $785,000 under a draft higher-levy scenario from the city’s general fund, a material reduction for a $25 million fund. Staff said they will continue tracking SSB 3001 and related bills while preparing conservative budget options.

The briefing included capital-improvement planning and a ballot proposal option: staff recommended spending $11,500–$11,800 to produce updated master-planning visuals for an $11–$12 million scaled sports complex and said a referendum would require council action to place it on the ballot. Staff also reiterated two top CIP items previously prioritized by council: a $4.9 million Manufacturing Drive project in Bluff and a $2.4 million pavement-management program.

Revenue tools were discussed as potential mitigants. Staff noted local option sales tax is expected to produce about $4.2 million and that two‑thirds of the franchise fee (about $2.3 million) currently go to debt service; council members raised concerns about the commercial impact of raising franchise fees and asked staff to analyze distribution formulas, including whether Clinton gets the portion of local option sales tax generated within city limits.

Council members and staff also discussed shared services with Clinton County (examples included HR, GIS and engineering), the city’s debt policy goal (targeting about 65% borrowed capacity in years nine and ten), and a conservative budgeting approach that starts department operating requests lower and models pay‑raise scenarios at 1%, 2% and 3% to show council dollar impacts per department.

Staff reiterated the next budget meeting will focus on proprietary and special revenue funds and is scheduled for next Thursday at 3 p.m.; packets are expected to be available by Tuesday. The session concluded after a motion to adjourn was made.

What’s next: staff will run more detailed scenarios (salary/benefit tradeoffs, levy impacts at different raise levels), return with an analysis of local option sales-tax allocations, and monitor state legislation that could change the city’s revenue baseline while the council proceeds through scheduled budget hearings.