Mt Pleasant News
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Neighbors Growing Together | Dec 18, 2014

City valuation drops slightly, but tax rate doesn't change

Council will host public hearing on FY 2014-15 budget March 5
Mar 03, 2014

By BROOKS TAYLOR

Mt. Pleasant News

Mt. Pleasant City Administrator Brent Schleisman is pleased.

Pleased that even though the city’s taxable valuation showed a very modest drop, the city is still able to hold the line on property taxes.

City council members will host a public hearing on the proposed $22,247,513 fiscal 2014-15 city budget as part of its council meeting Wednesday night at 5 p.m. in City Hall.

Mt. Pleasant’s property tax rate remains unchanged from fiscal 2013-14 at $12.18 per $1,000 taxable valuation. Broken down, the total levy includes a general fund levy of $8.10, debt service is at $3.03 and $1.04 for the employee (benefits) levy. The city’s taxable valuation decreased by nearly $2.5 million to $286,253,660, according to the city administrator.

“It’s nothing really glamorous, but I am really pleased with it (the budget),” Schleisman said. “It is pretty lean, but we did not have to make any cuts because we have been cautious because we knew things were coming.”

Schleisman was referencing property tax reform, some of which occurred in the 2013 Iowa legislative session.

For instance, commercial and industrial property now has a tax rollback. In fiscal 2014-15, the city will lose nearly $100,000 in commercial and industrial property tax revenue due to the 5 percent rollback. The state has promised to backfill (at least at the current time) the commercial tax loss.

The rollback for residential property is 54.40 percent, meaning residential property will be taxed at 54.40 percent of its assessed valuation. Last budget year’s rollback was 52 percent. Thus, the city’s property tax revenue from residential property will increase slightly.

When asked about the loss in taxable valuation, Schleisman said he wasn’t sure of all the contributing factors. “It is just multiple things that happened. I am assuming it had a lot to do with the commercial and industrial property valuation. It has been a long time since we have had a loss in valuation.”

The rollback of commercial and industrial property tax will hit Mt. Pleasant hard because it is essentially penalizing the city for its success in economic development. Mt. Pleasant has one of the highest percentages of commercial and industrial property valuations per capita in the state.

Mt. Pleasant is budgeting for a 20 percent increase in employee health-insurance premiums and a 2.75 percent salary increase for city workers.

A look at the major components of the levy follows.

GENERAL FUND

Revenues

• Hotel/motel tax revenue is projected to remain the same at $140,000.

• A $100,000 contribution from Mt. Pleasant Utilities.

• Beginning balance of $1,970,960.

Expenditures

• Capital purchases amount to $110,000.

• Hotel/motel tax revenue will provide $20,000 to begin tuckpointing the library/civic center building; $15,000 to the Festival of Lights; $12,000 toward Henry County Tourism; $10,000 to Historic Preservation Commission; $6,500 to Old Threshers.

SALES TAX

Revenues

• Beginning balance of $26,530.

• New sales tax revenue is projected at $740,000.

Expenditures

• Transfer to capital projects of $766,630 (which represents the total sales tax revenue and beginning balance) to fund the North Iris Street reconstruction project.

DEBT SERVICE

Revenues

• The debt service tax levy is $3.072, essentially the same as last year.

• The levy will generate $879,959 in revenue.

• The budget reflects a transfer of $332,890 from TIF (tax increment financing) into debt service.

• Included in the revenue is $23,860 reimbursement from the state to backfill the loss of commercial and industrial property tax revenue.

Expenses

• Majority of the expenses in the fund are paying on bonds for road construction, library/civic center, fire truck and the Crossroads Industrial Park. Total payments are $1,226,400.

• The 2014-15 fiscal budget shows the last debt payment for the Ashford Park Project which provided sanitary sewer and Linden Drive Street extension to Iris Street.

• Mt. Pleasant’s current city debt limit is 38 percent.

ROAD FUND

Revenues

• Beginning balance is projected at $570,417.

• Projected revenues are based on per capital provided by the League of Cities. The league recommends using $96 per capita, Mt. Pleasant’s budget is using $93 per capita.

• Total revenues including beginning balance are $1,378,401.

• Projected ending balance is 57 percent.

Expenditures

• Includes $100,000 for patch and repair work on city streets.

• The budget includes $61,000 placed in escrow for future equipment purchases.

• $20,000 is earmarked for the chip-and-seal program.

• Total expenditures amount to $880,654.

SOLID WASTE FUND

Revenues

• Fund beginning balance of $145,841.

• The recycling, haz-chem and administrative fee paid to the Des Moines County Regional Solid Waste Commission is increase by 10 cents to $3.35 per month.

• The base fee will remain at $2.50 per month and the garbage sticker prices remain at $1.50.

• Total projected revenues are $389,820.

Expenses

• The budget includes $23,000 to be put into escrow for a new packer and a new tub grinder for the compost site.

• Tipping fees will increase by $1 per ton starting July 1, 2014. Schleisman said the city will absorb the cost this year.

SANITARY SEWER FUND

Revenues

• Base rate stays at $7.50, flow rate increases July 1 from $4.30 to $4.40 per 1,000 gallons of usage.

• Budget reflects no surcharge for high-strength users.

• Total revenue generated will be $1,718,500.

• Beginning balance is $1,110,189.

Expenses

• Bond payment of $852,158 for the SBR plant, $250,000 for engineering on Jay Street reconstruction project.

• The budget includes $20,000 to repair private sewer repairs that may arise.

• A total of $40,000 has been budgeted to replace aging equipment at the SBR plant.

CAPITAL PROJECTS FUND

Revenues

• The city will receive $1,020,000 in grant funds that will help fund the North Iris Street project.

• Transfer of local option sales tax (LOST) funds of $750,000 to pay for the North Iris Street project.

• The budget shows a transfer of TIF funds (unspecified amount) to pay the additional amount needed for Iris Street.

Expenses

• Total expenses are $2,400,000 which is budgeted for the Iris Street reconstruction project.

“Overall, I am very pleased with it,” Schleisman concluded. “We have been cautious for several years because we saw things coming down the pike with tax reform. I think it is a good stable budget and the best news is that we can keep the (property) tax rate the same.”

 

 

 

 

 

 

 

 

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