The Prescott City Council approved the adoption of the 2026 budget at its Nov. 10 meeting, which will result in a slight increase in the city portion of residents’ property tax bills.

According to City Administrator Matt Wolf, the proposed 2026 property tax levy is $2,775,586, representing a 2.1% increase from 2025, or an additional $56,377.

This increase would adjust the city’s mill rate from .00483991 to .004995021 in 2026. The average home value in Prescott is currently $397,581, according to Zillow. The approximate increase for the average homeowner would be $61.66 in their city portion of property taxes, or $15.51 per $100,000 of home value, Wolf said.

Key budget factors include:

Employee retention and market adjustments: Final major step of wage adjustment plan

Cost of Living adjustment: 3% for all city employees, and 4% for all Prescott Police Union personnel

Library Department increase: The Prescott Public Library has the largest departmental increase at $43,545.70, primarily due to wage adjustments, higher health insurance premiums, and a reduction in Act 150 revenue for library services.

EMS contract adjustment: The EMS service contract with the City of River Falls (serving Prescott, Oak Grove, and Clifton through Allina EMS) reflects an increase of $27,772.

Offsetting revenues and new construction: The overall levy impact has been partially offset by new construction growth and additional state aid, including increases in both General Transportation Aid and Supplemental Municipal Aid from the State of Wisconsin.

Compost site operations: Due to increasing costs associated with mulching operations at the City Compost Site, the budget includes a $20 permit fee increase. Resident permits will rise from $0 to $20, and non-resident permits from $35 to $55, to help offset ongoing operational expenses.

The largest city expense is the police department, which accounts for 39% of the budget. Administration also saw an increase due to moving IT expenses under their purview.

In terms of the city’s financial stability, the city’s current debt limit is $33,881,070, with the city maintaining a current Aa3 borrow rating; $12,137,000 is outstanding general obligation debt, while the city’s available borrowing capacity is $21,744,000, or 64% of the limit. The most recent borrowing occurred in 2025 for the Riverfront Phase II Project.

“The City’s Capital Improvement Plan (CIP) includes planned borrowing of $1,545,350 in 2026 for repairs and improvements to Orrin Road. However, with the city now partnering with the Wisconsin Department of Transportation (WisDOT) through the Transportation Alternatives Program (TAP), a pedestrian study has been completed. The next step will involve applying for a construction grant in 2025-2026. As a result, the planned borrowing for Orrin Road is proposed to be deferred to 2027, aligning with the scheduled Fire Engine #2 replacement. Consequently, the City is not proposing any General Obligation borrowing in 2026, and the Debt Service Levy is projected to decrease from $394,950 to $376,484,” budget documents state.

“For our valuation this year we saw a 1.24% net increase due to new construction,” Wolf said. “And that’s a total growth of just over $8.2 million. Anytime we have growth that obviously helps us with offsetting potential levy increases.
“However, one of the things that did result this year was we lost state aid in the form of the expenditure restraint program. Mainly this was due because in 2023 when we did a re-evaluation, our mill rate dropped below 5, which for the program you have to be 5 or above in order to qualify for that expenditure restraint period. So right now, our mill rate is essentially too low for us to qualify.” This caused a decrease in state aid of $15,142.

State highway aid is projected to increase by 7%, or $19,933 due to the city’s higher capital spending, which factors in a six-year rolling average used to calculate highway aid. Spending included the money the city used for the Locust, Elm and Washington streets projects.

In this budget, staff is proposing to use $70,348 of general reserve fund money to pay for police department taser replacements ($30,611) and an IT server upgrade and replacement ($34,537), replacing 2016 outdated servers.

In terms of the Sewer Utility Fund, the projected year-end balance is $4,638,668, which provides flexibility for the wastewater treatment plant expansion or other improvements, Wolf said. For 2026, the fund is projected to have a 5.8% rate of return.

Cedar Corporation is currently conducting a planning study to evaluate a treatment plant expansion.

The 2026 Sewer Fund budget projects a $65,223 surplus, down from $193,822 in 2025 due to inflation, West Central Biosolids processing fees (where the city hauls its sludge) and flat revenue.

“We’re not proposing raising any sewer rates for next year,” Wolf said. “For the Water Utility Fund, we’ll see the second step of our water rate increase. This was approved by the Wisconsin Public Service Commission. We are expecting this second step to go in Jan. 1, 2026, so people would begin seeing those additional rates and their first bill at the end of March.”
The increase is estimated to be an additional $27.51 per quarter for an average water consumer in Prescott using 11,525 of water quarterly. This would only be for the water portion of the utility bill, not sewer or stormwater.

The year-end balance for the fund is expected to rise to $429,137. Major costs anticipated in 2026 include Well #4 maintenance (treating and remediating the wells) and debt service payments.

“The Finance Committee recommended reinstating Payment in Lieu of Taxes (PILOT) in 2026, eliminating the previous forgiveness amount of $72,307, allowing the full relief to the General Fund and offsetting impacts to property taxes,” Wolf said.

As for the Storm Utility Fund, its projected to end 2025 with a balance of $120,271, a decrease of $21,382 from 2024. The decline is primarily due to curb and gutter repairs completed as part of the 2025 mill and overlay project. For 2026, the Storm Fund is expected to have a deficit of $11,779, mainly due to rising costs in storm repair and maintenance, according to city documents. No rate increases are proposed for 2026, since the city implemented a $1 per Equivalent Runoff Unit (ERU) increase in 2025. Staff is recommending the council reevaluate storm sewer rates during the 2027 budget cycle.

The 2026 Capital Improvement Plan budget is $406,406, which includes the following projects:

1. City Hall/Library parking lot repair - $31,863
2. Police department vehicle replacement - $65,000
3. Public Works lawnmower replacement - $16,000
4. Police training room improvements - $15,000
5. Public Works three-stall garage - $142,051
6. Sunset Park improvements - $99,260

Other business

• Health & Safety Committee Chair Dar Hintz said two liquor licenses are available in the city.
• Tourism Committee President Megan Langer said the new Prescott tourism website will go live in January.
• The council approved the appointment of Elizabeth Vetter to the Tourism Committee.
• The council entered into closed session on three items: Potential purchase of land extension of Jewell Street, potential purchase of land for public safety building and potential sale of land in Prescott Business Park.