City Council Reviews 2026 Budget, Emphasizing Fiscal Flexibility and Accountability
- Steve Jurrens
- 2 days ago
- 2 min read
Northeast Radio SD News - Watertown, SD - The Watertown City Council formally introduced the proposed 2026 City Budget Ordinance on Monday night, marking the first of two readings. The discussion, led by City Manager Alan Stager, highlighted a philosophy of fiscal planning, accountability, and the need for ongoing budget flexibility in a changing economy…
Stager framed the budget as a "plan at a point in time," noting that he views budget supplements as an acceptable and necessary tool as economic conditions inevitably shift…
"I don't believe anybody should view a budget, although it's memorialized in ordinance, as the green light to go ahead and spend at that level," Stager stated, stressing the importance of continuous discussion and fiscal accountability throughout 2026.
He specifically commended city staff for their work on the budget, noting that departments—such as Parks and Recreation—have implemented a new cost-recovery model to inform budget decisions, aiming to improve fiscal accountability.
Since the last review session, Stager outlined several minor adjustments to the spending plan:
· E911 Funding: An appropriation of $100,000 was added to the E911 fund, which had been inadvertently omitted.
· Police Equipment: A $20,000 appropriation was included to replace a police department drone that was recently damaged, labeling the tool as "pretty critical."
· External Organizations: The method for funding external non-profit organizations for 2026 will revert to direct funding, a shift from a proposed third-party model.
Stager noted that while a third-party model is the desired long-term approach, the city lacked the necessary time to implement it effectively this year.
· Vehicle Placeholder: A capital expenditure placeholder was added for an "undetermined vehicle" to ensure flexibility should a new vehicle be required in a department during the year, despite an initial moratorium on new vehicle purchases.
Discussion on TIF Debt Service
Councilman Kyle Peters raised questions regarding the debt service payments associated with Tax Increment Financing (TIF) districts.
Stager and the Chief Financial Officer clarified that the majority of the city's TIFs are "pay-as-you-go," where the city acts as a conduit. They confirmed that the city is responsible for debt service payments on TIFs 5 (Willow Creek) and 11 (Marketplace). Specifically, the CFO noted that a $1,600 payment was associated with TIF 10, which was structured as an interfund loan…
While Stager noted that most initial TIFs were structured for economic development, he confirmed that a couple of the newer TIFs are now classified as housing TIFs.
Following the discussion, Mayor Holien concluded the item, setting the stage for the budget's final consideration at the next meeting.
