SOLON — With the fiscal 2026 budget process underway, Solon city officials are grappling with unprecedented financial complexities, including budgeting for a $27 million wastewater treatment plant and navigating the uncertainties of federal and state funding.
Cami Rasmussen, city administrator for the City of Solon, explained that the city council and staff are currently in the process of drafting the budget for fiscal 2026 — which will start on July 1, 2025.
While the FY26 budget has not yet been finalized, Rasmussen said Solon’s property tax levy is expected to decrease slightly next year, dropping from 11.21346 to 11.01225, meaning property owners could see a small reduction in their tax rate.
Solon City Council has a public hearing scheduled for Wednesday, April 2, at 5:30 p.m. specific to the tax levy, and another Wednesday, April 23, at 5:30 p.m. for the full FY26 budget.
The next step in the process, which Rasmussen said will happen in October, is for the directors of all the departments within the City of Solon to plan their expected costs for the next fiscal year and submit those amounts to city council.
“That’s hard to do because it’s several months away,” Rasmussen said. “But how we do that, to the best of our ability, is looking at history.”
In addition to historical spending patterns, Rasmussen said department directors examine existing and anticipated trends, such as increased utility rates.
Rasmussen said one unique challenge Solon City Council and staff will have to tackle this year is budgeting for a new $27 million wastewater treatment plan.
“It will be the largest project the City of Solon will likely undertake,” Rasmussen said. “Our largest project to date, for comparison, was the new fire station at $4.2 million. So $4.2 million to $27 million is quite a dramatic difference.”
The reason for the new plant, Rasmussen said, is a combination of the Department of Natural Resources changing regulations for city water and sewer management as well as Solon’s current plant aging. Rasmussen said that a majority of the revenue for Solon, and most small cities in Iowa, comes from residents’ property taxes. However, for a project as large as the new wastewater treatment plant, Rasmussen said Solon City Council and staff are currently seeking additional sources of state and federal funding to offset the financial burden to residents.
“We’re trying to really be fiscally conservative and fiscally responsible,” Rasmussen said.
Since President Donald Trump began his second term, the prospect of federal funding cuts has emerged as a central issue in local policy initiatives. Rasmussen said that the City of Solon has received $400,000 in federal funding in recent years due to the American Rescue Plan Act — a broad economic relief measure signed by former President Joe Biden to mitigate the impacts of the COVID- 19 crisis.
“[It’s] definitely a concern if federal funding is not available to help,” Rasmussen said. “[The wastewater treatment plant is] a major project.” Rasmussen said the City of Solon is currently in the design phase for the plant using a $3 million loan from the State Revolving Loan fund which allows cities to borrow money for large infrastructure projects at a low interest rate.
Construction of the new plant is expected to start in 2027 and complete in 2029.
In addition to potential loss of federal funding availability, Rasmussen said the City of Solon has been impacted by state laws enacted in recent years. She said House File 718 has dramatically impacted the funding structure of many cities in Iowa by changing the levy structure, which dictates the amount cities can collect from property taxes to fund local services.
“It’s really turned the budget process upside down for cities,” Rasmussen said of House File 718.
“There’s levies that we could ask for previously we can no longer ask for. That means a reduced amount of money coming into the city.”
Despite the challenges, the City of Solon has consistently ranked among the lowest three cities in Johnson County in property tax levies, a fact Rasmussen said is a point of pride for the city.
“The Solon City Council and department directors have worked hard to draft a fiscally responsible FY26 budget that ensures the best city services we can offer with funds available,” Rasmussen said. “I believe the success of Iowa as a state is reflected when cities are given the tools needed to become their best version to serve their community.”
Rasmussen also emphasized that only a portion of residents’ property taxes are allocated to the City of Solon.
“A portion goes to the school, a portion goes to community colleges, a portion goes to the county, a portion goes to the state,” Rasmussen said. “People don’t necessarily understand that there’s more than one taxing entity on their property tax bill.”