Keokuk work session frames $1.7M general‑fund gap; mayor, staff propose cuts to tourism and local grants

Keokuk staff told the council the proposed FY27 budget, as presented, leaves the city about $1.686 million short in the general fund, and outlined a menu of revenue and spending options to close the gap.

Jim, the city administrator, reviewed hotel‑motel (tourism) allocations and proposed reductions: Main Street funding trimmed from $65,000 to $40,000, elimination of a $11,000 fine‑arts line and proposed cuts to pavilion and art‑center support. He framed the proposed reductions as part of a broader effort to reduce a projected $1.7 million general‑fund deficit while preserving essential services. “We have a $1.7 million deficit in the general fund and trying to figure out how do we get to a balanced budget,” Jim said.

The staff packet also presented revenue strategies: raising electric and gas franchise fees (noting notice and ordinance timing constraints), eliminating a franchise‑fee rebate program, modest increases to in‑lieu payments from the municipal water utility, and targeted fee increases (building permits, cemetery lot sales). Jim warned that ordinance, billing and collection cycles mean a franchise fee change would not yield a full year of revenue in the first budget year; council staff estimated an initial shortfall even if a rate change is approved because collections lag implementation.

Council members pressed staff on alternatives, including reallocating tourism gaming revenues and encouraging nonprofits to apply for community‑foundation grants. Some members worried the cuts would significantly affect local groups: Main Street leaders and local arts organizers were singled out as having relied on the city allocation for façade work and programming. Council asked for clearer budgets from affected organizations (pavilion, arts, Main Street) to determine what net impact reduced allocations would have.

Why it matters: the package of cuts and fee changes would reshape local support for tourism, arts and small nonprofits while aiming to protect core services and a reduced debt‑service levy that has been a priority for the administration. Jim emphasized the need to act now to preserve cash reserves and avoid short‑term borrowing.

What’s next: council scheduled committee follow‑ups and a Saturday workshop to refine the list of cuts, vet timing of franchise‑fee changes and determine a final set of budget amendments to present for formal adoption.