By 
City Manager, Amanda Mack
An ongoing project that city officials have been working on since July, the first draft of the 2025 city budget was presented to the Watertown City Council Oct. 15 by City Manager Amanda Mack in a two-hour council meeting at city hall.
The meeting, which included the council, city manager, and all department heads, was for the council to ask questions about the budget so they could make informed decisions on it at future meetings.
According to Mack, the budget process this year differed significantly from past years—the most significant change was to switch the budget from a historical average to a base budgeting process which focuses on long-term stability.
Budget highlights:
- Accurate and conservative budgeting
- Reduced budgeted deficit for General Fund vs. previous years
- 4% wage increase for employees
- 7% health insurance cost increase
- Modest Sales Tax growth of 2.1%
- $41 million General Fund increase from 2024 Adopted Budget or 1.6%
- Intuitive, lean and streamlined
- Efficiency/organizational improvement
- Long-term financial sustainability mindset
Overall, the proposed city budget for 2025 is the roadmap for spending the $72,113,120 in funds that have been requested. The primary funding sources for this money come from the Sales and Use Tax (also called the 1st and 2nd Penny sales tax), Property Tax, BBB Tax, transfers in from other funds, charges for services, fees, permits, and other taxes.
A chart published by the City of Watertown laying out the division of the 242 full-time personnel employed by the city.
On the employee side of things, the city currently has 242 full-time employees and has no intentions of adding additional full-time positions in 2025. While the city is still bargaining with three unions representing its employees, those on payroll should receive a 4% pay raise next year.
Two more projects the budget allocates to begin funding for is the creation and implementation of a city-wide facilities maintenance program along with a comprehensive facilities study and the creation of a centralized, city-wide fleet vehicle maintenance program to service city-owned vehicles instead of using contractors.
The fleet maintenance program, slated to begin in 2026, will ultimately become a new division of the public works department with the goal of reducing costs by using the economics of scale.
Based on previous municipal budget cycles, the most contentious part of the budget process has been the funding amounts to external community organizations.
This year, community organizations requested $1,273,401 from the city—but the initial budget only recommends $1,119,998 to go to these groups. While some of these contributions are contractually obligated, many are not, which can lead to the council adjusting funding levels for one reason or another at future meetings.
City manager recommended contribution amounts for 2025 are as follows:
- Watertown Convention & Visitors Bureau: $350,000
- Boys & Girls Club of Watertown: $254,000
- Watertown Cares: $10,000
- Mellette Memorial Association: $10,800
- Human Service Agency: $15,698
- The Goss Opera House: $22,000
- Watertown Figure Skating Club: $12,500
- Watertown Chamber of Commerce: $90,000
- Cookin’ on Kampeska: $10,000
- Codington County Search and Rescue: $18,000
- Watertown Artwalk, Inc: $2,500
- Community Transit of Watertown/Sisseton, Inc: $40,500
- Inter-Lakes Community Action Partnership, Inc: $7,500
- Beacon Center: $50,000
- Dani’s Balcony-Indigenous Outreach: $3,000
- Watertown Municipal Band: $12,500
- The Salvation Army: $0 (new request)
- Codington County Historical Society: $11,000
- Watertown Development Company: $200,000
The budget also mentioned the possibility of Initiated Measure 28 passing on the November ballot.
Initiated Measure 28, if passed, would eliminate the sales tax on anything labeled “for human consumption” and is more commonly known as the food tax.
If IM 28 passes, it would tear a hole in the city budget to the tune of around $2.4 million based on 2024’s numbers. In September, the council passed a resoultion opposing the passage of IM 28 due to the impact it will have on the city budget.
For 2025, the budget funds all projects completely for the year, even though the law would go into effect July 2025 if passed. In 2026 the city will have to take a hard look at where and what to cut and could go as far to reduce funding of essential services to close the budget gap.
Other significant expenditures in the budget include a new ambulance and the equipment it requires for $345,500, three new police vehicles for $162,000, and a Lenco Bearcat tracked rescue vehicle at a cost of $355,000.
Notable street department projects include new pavement projects ($3,250,000); concrete repairs and upgrades ($250,000); bridge inspection fees ($10,000); and the 14th Avenue bridge replacement ($350,000).
The next steps the budget will go through are council negotiations starting at their Oct. 21 meeting, then after approval, the cursory first and second readings of the ordinance in November which approves the budget. At that point, the budget must be published as required by state law and finalized (after some other minor parts fall into place) by the end of the calendar year.
To submit opinions or thoughts on the city budget for 2025, contact the council representative for your ward, Mayor Ried Holien, or City Manager Amanda Mack.
