How do you budget for the 2026–27 fiscal year increasing overall spending while keeping the city’s property tax rate slightly lower and holding most staffing levels steady? That’s the goal of the Ames City Council.
The council was presented with a proposed $361.6 million budget recommended by City Manager Steve Schainker at a budget hearing held Jan. 30. The proposed budget was outlined by Schainker and members of the city’s finance department. The budget outlines how the city would fund daily services, major construction projects and long-term investments if the council approves it later this spring. The budget would take effect July 1. The council’s budget process is limited by new state legislation.
“The budget integrates council values, goals and priorities with the results of the annual resident satisfaction survey, wherein our community members indicate where they want tax dollars to be spent or invested in Ames,” Ames Mayor John Haila said.
Most of the proposed spending is split between everyday operations and capital improvement projects. About $171.8 million would go toward operating expenses such as police and fire services, utilities, street maintenance and library operations. Another $110 million is proposed for capital improvement projects, which include large infrastructure upgrades and construction projects planned over several years.
“So, as the council reviews the budget, we’re pleased to see the commitment staff has taken to proposing modest increases to accomplish [council goals and community members’ values],” Haila said. “The budget includes modest yet equitable compensation to city employees who provide desired and expected services.”
City services account for the lion’s share of the budget
Utilities account for the largest share of operating costs in the proposal at about $92.1 million. This includes electric services, water distribution, sewer systems, stormwater management and resource recovery. City officials note utility operations are primarily funded through user fees, not property taxes and are designed to fully cover operating costs, debt and long-term capital needs.
Public safety is another major focus of the proposed budget. About $25.4 million is allocated for police, fire, building safety and animal control services. The plan includes funding for one additional firefighter position as the city prepares for a future fourth fire station.
Overall city staffing would remain at about 605 full-time equivalent employees, with no net increase from the current year.
“Each year staff presents council with a well-thought-out budget that strives to continue delivering exceptional services and amenities to our residents with modest increases in operational expenditures,” Haila said.
Transportation services would receive about $27.4 million under the proposal. This includes funding for street and traffic system maintenance, the CyRide transit system, parking operations and airport services. Street and transit services make up the largest portions of transportation spending as the city continues to maintain roads and support public transportation.
Cultural and recreational programs are proposed at about $14.1 million. This category includes parks and recreation, library services, cemetery operations and art services. While art services represent a small share of the total budget, city officials say public art helps strengthen community identity and enhance public spaces throughout Ames.
Community development programs would total about $9 million in the proposed budget. These funds support planning services, housing programs, human services, economic development efforts and sustainability initiatives aimed at improving long-term growth and quality of life.
General government operations, including the council, city manager’s office, legal services, finance and human resources, total about $3.8 million.
How the budget is funded
The proposed budget is supported by projected revenues of $341.6 million, an increase of about 6.5% from the previous year. Property tax revenue is expected to rise about 6.2% due largely to higher property valuations.
“Existing residential property owners should expect an increase of approximately $7.66 per $100,000 of assessed value, or about 1.57%, in their city property taxes,” City Finance Director Corey Goodenow told the Ames Voice.
However, the total property tax levy rate would decrease slightly, meaning the city would collect more overall taxes while lowering the rate per $1,000 of taxable value. The difference between projected revenue ($341.6 million) and projected expenses ($361.6 million) will come from funds with existing balances going into the new budget year. The city maintains minimum fund balances for all funds, and all proposed spending complies with state requirements.
“This change primarily reflects voter-approved debt service associated with the relocation of Fire Station Number 2, the addition of a firefighter position, continued reductions in state funding, and the opening of the Fitch Family Indoor Aquatic Center,” Goodenow said. Additional revenue sources include local option sales tax, hotel and motel taxes, utility charges, state and federal grants, and bond proceeds. Utility charges remain the city’s largest single revenue source.
City staff members say the proposed budget reflects a balance between maintaining essential services, investing in infrastructure and planning for future growth, while remaining fiscally responsible.
“Each year, the city manager and department staff conduct a thorough and comprehensive review of departmental budgets and bring forward a recommended budget that carefully evaluates spending and aligns with community priorities,” Goodenow said.
The council will review the proposed budget during public meetings and hearings in the coming weeks. Residents will have opportunities to comment before the council considers adopting a final budget for the 2026–27 fiscal year.
What’s next: Three more hearings will be held to further review the budget. They will begin at 5:15 p.m. Feb. 3, 4 and 5 in the council chambers.
The next regularly scheduled council meeting is at 6 p.m. Feb. 10.
