Davenport City staff presented a balanced fiscal year 2026 budget at a Saturday budget workshop and reported that the city’s general fund reserve is at 25%, near the top of the council’s policy range.

City finance staff said the city ended fiscal 2024 with an increase in unrestricted cash across funds of about $2.7 million and that current assets in governmental funds cover current liabilities by roughly 338%, well above the city’s policy minimum. Staff said those measures support the city’s credit profile and that they plan to recommend refinements to liquidity policy to retain favorable bond ratings.

Staff also flagged a small number of funds that need attention. The IT internal service fund showed negative cash of about $240,000, which staff attributed to the timing of prepaying annual software contracts. The airport fund had a year-to-date loss of roughly $31,000, and the parking fund showed a small negative cash position (about $218). Staff said those accounts will be reviewed as part of the FY26 monitoring.

City staff described a number of steps that improved the city’s fiscal position over the last decade, including reductions in negative-cash funds and changes that have supported better bond pricing. Staff said the trust and agency fund — which pays employee benefits including fire and police pensions — is uncapped and currently requires further contributions to reach a 25% operating-reserve goal; staff reported a shortfall of about $432,000 against that target.

On operating trends, payroll and benefit spending through mid-year were slightly below expected pacing: general fund payroll at about 46.2% of budget (expected 47.7%), and trust-and-agency benefits at about 46.1% of budget. Health-care costs are rising; staff reported year-to-date claims trends and estimated the annual health-care budget would increase relative to last year, while describing cost-containment strategies already in place.

Staff closed with a timetable: the council is scheduled to review the detailed FY26 budget in upcoming work sessions and must certify the budget to the Iowa Department of Management before the statutory deadline. Staff warned the schedule is tight and noted a rule suspension requirement in April that will affect final adoption timing.