city budget

Finance director update reported the 2025 General Fund was close to plan through August, with spending slightly ahead of a straight-line pace but described as very close to budget overall.

General government budgets were not reviewed; staff said the review would return at a future meeting.

Committee discussion noted expectations that shared revenue and highway aid will rise in 2026 and that property/liability insurance costs may drop; these were described as projections.

Staff discussed a challenging 2026 budget and described potential service impacts including overtime reductions, fewer part-time hours for plowing and leaf collection help, and ending the Snow Watch program in 2026.

Staff warned of reduced funding for concrete/asphalt patching and winter supplies (salt/sand), and said the city will need close monitoring to avoid surprises.

Staff reviewed ongoing changes to proposed 2026 budgets, including staffing changes tied to retirements and a WDNR-required certified operator position.

Staff indicated benefits costs were increasing while overtime was decreasing.

Public Works capital in the proposed 2026 budget was described as significantly reduced, with no major equipment purchases.

Committee discussed eliminating Snow Watch as redundant and expecting police to help instead.

A meeting agenda included an action item titled “Treasurer Report.”

City Council held the legally required three-call public hearing on the proposed 2026 city budget.

At the budget public hearing, Dean Hirvela raised concerns about stopping Memorial Day cemetery flowers tied to a separate flower fund.

At the budget public hearing, Katherine Dahlke questioned the tax increase and a reported 107% increase in miscellaneous revenue, and asked why departments that underspent still receive increases.

At the budget public hearing, a Library Board member urged approval of the library’s requested 2% increase to avoid service cuts.

The third call of the budget public hearing had no speakers.

Staff presented and discussed a draft 2026 budget described as $42 million with a proposed 3.8% property tax levy increase.

Staff described using one-time items (including land sales, debt premium, and a cell-tower payment) to help balance the year.

Council discussion included whether to restore cemetery flower funding, whether to fund library services at the level requested by the Library Board, and how to handle special events funding if concession revenue is redirected to the General Fund; no final decisions were made during this discussion item.

Personnel and Finance Committee reviewed the proposed 2026 budget and heard the finance director explain how the City Manager’s budget has changed since 2023 and how the General Fund proposal evolved from the first presentation.

Committee voted 2-0 to recommend the budgets and a proposed 4.05% property tax levy increase to City Council, with requested changes: shift $2,000 to restore cemetery flower funding, remove the 2% library levy increase, and seek $5,000 more from the Room Tax Committee.

Committee discussion of the 2026 General Fund budget said it was not yet balanced, with about $60,000 still needing to be cut and additional revenue still needed.

Committee discussed options for balancing the 2026 General Fund budget but did not reach a full solution at that meeting.

Committee voted to recommend shifting concession stand income into the General Fund rather than the Special Events Fund.

Committee reviewed capital projects totaling $3,388,000, including $2,176,318 supported by property taxes.

Committee discussed a proposed 2025 property tax levy intended to support the 2026 budget but did not make a recommendation; the levy figure was not settled because the General Fund budget was not yet balanced.

City Council approved a 2-year settlement/collective bargaining agreement with Two Rivers Police Local 13; vote was unanimous (9-0).

Council adopted the City of Two Rivers’ 2026 tax levy at $5,745,073, described as a 4.05% ($223,712) increase from the previous year; vote was 7-2.

Council authorized carrying forward and using all allowable prior-year unused levy capacity for the 2026 budget; vote was 9-0.

Council adopted the full 2026 fund budgets totaling $41.7 million in appropriations and set the BID assessment rate at $1.77 per $1,000 of assessed value; vote was 9-0.

Agenda materials described cemetery flower funding as $2,700 in property tax support for one final year, plus $3,300 proposed to be raised via a community crowdfunding campaign launched by city staff.

Staff reported 2025 room-tax revenue was significantly below budget, with the decline starting in April.

Staff cited the NFL Draft as an example of an event expected to boost bookings that did not materialize for Two Rivers, and said they are tracking events to improve future budgeting.

Staff forecast the room-tax reserve fund would end 2025 at $62,299, below the commission’s $90,000 goal.

Commission expected to revisit 2026 budget adjustments at its Q1 2026 meeting.

An agenda item was listed to review and approve the final 2026 budget.

City Council adopted a settlement agreement with Two Rivers Fire Fighters IAFF Local 423 described as including scheduled wage adjustments and targeted updates to benefits, training compensation, and lateral hiring provisions; vote was 9-0.

Committee was told health insurance costs are trending higher for 2026; the provider is looking for ways to reduce plan costs, and staff will keep evaluating whether joining the State health insurance plan would save money.

Committee reviewed unaudited 2025 results showing the City ended the year with a deficit, with revenues short and spending slightly over budget (101.45%).

Staff attributed the 2025 deficit to overestimated Public Works charges, Sandy Bay lot sale revenue no longer being recorded in the General Fund, an SRO fee collected in 2026 instead of 2025, and a lower utility PILOT payment tied to equalized value ratios.

City Manager described a two-year “Shared Savings Incentive Program” pilot intended to encourage departments to save money.

Through March 31, 2026, staff reported the General Fund had about $3.61 million in revenues (28.0% of budget) and about $3.11 million in spending (24.2%), for a positive position of about $495,655; staff said this was about $139,000 better than the same point in 2025.