Iowa lawmakers signal support for bill to correct North Liberty public notice mistake

NORTH LIBERTY — The city of North Liberty is looking to move forward from a mistake that missed the deadline to publish notice of a public hearing and ultimately prevented the city from certifying its Fiscal Year 2026 budget and approving next year’s tax levy.

An email to place a notice in The Gazette — the newspaper of record for North Liberty — was not sent prior to the city budget’s second public hearing on April 22.

Iowa law requires that cities post notice of a public hearing no less than 10 days before the public hearing and no more than 20 days in advance.

The budget was not formally approved by the April 30 deadline, which means the city will be limited in the amount of tax revenue it can collect. The mistake could result in the city collecting $1.3 million less than it planned to collect.

However, city officials were hopeful this week that state legislators would pass an amendment to a bill that would allow the city to adopt the budget and set the tax levy after the deadline.

“I want to reiterate our council’s appreciation to the statehouse for taking up and considering a motion to help us out in this difficult situation, Rep. (Amy) Nielsen being our representative and taking that in a bipartisan effort to get that to the floor …,” council member Brent Smith said at Tuesday’s council meeting.

House File 1052, which relates to cigarette and tobacco product regulations, was amended this week to include a provision that gives Iowa cities with a population between 20,400 and 20,500 that missed the deadline to certify their Fiscal Year 26 budget, until July 1 to approve the budget.

North Liberty’s population, according to the 2020 U.S. Census, is 20,479.

The bill was approved by the House Ways and Means Committee on Monday. On Wednesday, as the legislature neared the end of its business for the year, Rep. Bobby Kaufmann, R-Wilton, chair of the House Ways and Means Committee, said House and Senate Republicans had agreed to the amendment and he expected the bill to be passed by both chambers and sent to the governor.

“We're extremely grateful, even for them to consider it. But, maybe at some point too, we could look at the fact that this happened by one simple email that didn't get sent and I feel like there should be more protections for cities in case something like this happened again,” said council member Paul Park on the proposed legislation.

In the event that the bill does not pass or is not signed by Gov. Kim Reynolds, the city would work with the Iowa Department of Management to update the required paperwork to reflect the current fiscal year’s budget tax rates.

City staff said the shortfall would have the largest impact on the city’s debt service fund, which City Administrator Ryan Heiar said has about $1.6 million in surplus.

“It's never necessarily good to be a case study, but if there's a case study to be used to maybe build in some protections for cities with honest mistakes like this, maybe this is one they can consider in the next session,” Smith said.

City staff look to improve processes

City staff said they are already considering ways to ensure a mistake like this doesn’t happen again.

“On our part, it was a substantial mistake, and it's something that … we're talking about just in terms of process improvements and how we how we avoid this type of situation,” said Heiar at the council meeting Tuesday.

Part of that will include considering different agenda management software.

Initial proposed FY 26 budget

North Liberty’s proposed budget for Fiscal Year 2026, which begins July 1 and runs through June 30, 2026, was a balanced budget of $19.9 million, up $1.2 million from the current year.

The proposed property tax levy for next year is $11.87 per $1,000 of taxable valuation, up 32 cents from $11.37 in the current fiscal year. The city said the proposed rate increase is related to debt service, in part due to capital projects such as construction of a new city hall.

Additionally, water rates would increase 6 percent under the proposed budget, for the first time in four years.

Next Steps

The city has set a date for a second public hearing on the Fiscal Year 26 budget for May 27.

After notice of the public hearing has been posted and the hearing has been held, the city council can adopt the budget.

Tom Barton and Erin Murphy of The Gazette contributed to this report.

Comments: megan.woolard@thegazette.com

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