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Tuesday evening meeting opened with a special meeting for a public hearing on the proposed property tax levy for the city of Ottumwa Fiscal Year 2027.
As required by Iowa Code, a hearing on the proposed tax levies must be held separate from the public on the proposed budget. Taxable property variations increased 4.86% Consolidated general fund levy revenues were limited to 2.8% with an automatic adjustment to the levy. Other individuals levies have changes due to rising expenses that are paid through levies.
Changes are as follows:
Fund FY 26 Levy Proposed Levy %Change Revenue Increase %Change
001 8.51942 8.35237 • 1.96% $171,827 2.88%
112 7.61617 7.65162 0.47% $289,434 5.43%
129 0.79362 0.88558 11.59% $ 95,038 17.10%
200 4.06475 4.06087 -0.10% $183,220 6.17%
Total 20.99396 20.95044 -0.21% $739,519 4.99%
The submitted total levy was $21.42155. Several changes were made as part of the March I 01h meeting that reduced the proposed levy to approximately $20.85. Further changes were entered to reflect possible increases in Police and Dispatch wages and the addition of two current employees to the city’s health insurance plan increased the benefit levies. Current proposed total levy is $20.95044, a reduction of$0.04352 from FY 26.
Cole O’Donell,Finance Director explained what the tax levies are paying for:
What are the tax levies paying for: • General Fund (00 I): $6,147,538 directly plus $4,770,183 from Fund 112 for benefits. This is 70.28% of all tax revenue received. The General Fund includes all public safety operations, Community Development, Building and Code, Parks/Recreation, and General Government. • Employee Benefits (112): Remaining $853,958 to Airport ( 131 ), Library (133) and Cemetery ( 135) for employee benefits. • Tort Liability (129): $650,925 for property and liability insurance for General Fund, Library. and Cemetery only. • Debt Service (200): $3, 154.439 for GO debt obligations. An additional $1,808,590 is transferred into the fund to pay or partially pay for certain speci tic use debt.
Effect on residential and commercial property:
100% Valuation Taxable Valuation Annual Tax Increase Monthly Increase
7.54% increase
$107, 540 $ 47, 925 $ 8. 27 $ 0. 69
$322, 620 $143, 774 $24. 80 $2. 07
Reasons for increases:
Property and liability insurance rates increased due to re- appraisal of facilities and equipment to better reflect current replacement costs. Health insurance premiums will rise by 12. 8%, necessitating an increase in the benefits levy. Additionally, it has become necessary to levy for benefits for employees in Road Use Tax( 110) departments. In FY 27, one quarter of the benefit costs are levied for. An additional one quarter of the benefits are being funded from insurance reserves. Future budgets will need to levy 100% of the expenses. The General Fund( 001) portion of the benefits levies( 112) is reduced by$ 100, 000 and the cost of benefits will not be fully covered by the levies. This is part of the City’ s effort to meet levy reductions mandated by the State of Iowa in HF 718. The consolidated General Fund Levy must be at its maximum in order to levy for benefits. The reduced benefits levy amount is equal to 0. 139 in FY 26 dollars.
The City of Ottumwa will hold a public hearing regarding its proposed property tax levy for the upcoming fiscal year, which runs from July 1, 2026, through June 30, 2027. The hearing is scheduled for April 7, 2026, at 5:30 p.m. and will take place at City Hall, located at 105 East Third Street in Ottumwa. During this meeting, residents and taxpayers will have the opportunity to present objections to or arguments in favor of the proposed levy. Following the hearing, the City Council will publish notice and conduct a separate hearing on the full proposed city budget.
According to figures certified by the Iowa Department of Management, the city’s taxable valuation for non-debt service is projected to increase from $700,444,920 in the current fiscal year to $735,026,210 in the proposed budget year. The proposed total property tax levy for regular city purposes is $15,914,995, compared to $14,829,197 in the current year. The proposed city tax rate is 21.42155 per $1,000 of taxable valuation, up from the current rate of 20.99396.
Several areas within the budget show increases, including the consolidated general fund, liability and property insurance, police and fire retirement, FICA and IPERS contributions, and other employee benefits. Debt service is also projected to rise, from $2,971,219 to $3,154,439, alongside an increase in taxable valuation for debt service purposes.
Property owners may see a noticeable change in taxes. For a residential property with an assessed value increasing from $100,000 to $110,000, the annual city tax would rise from approximately $996 to $1,049, representing a 5.33 percent increase. For a commercial property with an assessed value increasing from $300,000 to $330,000, taxes would increase from about $4,328 to $4,901, a 13.24 percent increase.
City officials cite several reasons for the proposed tax increase. These include rising property insurance appraisal values leading to higher premiums, the addition of four new positions reflected in employee benefits levies, and a projected 12.8 percent increase in health insurance premiums.
https://www.ottumwa.us/government/mayor_and_city_council/agendas_minutes.php
