City raises property taxes and utility rates in new budget

Staff writer

No public comment was raised Monday during a special meeting where Marion City Council approved a budget that increases property taxes and utility costs.

Rates for all utilities are budgeted to increase $1.50 for base rates, but won’t be approved until at least January. Electric rates could increase or decrease based on increases passed down to the city. The increases, if approved in full, would add nearly $70 per year to residents bills.

Also paid for by utility revenue are debt payments. The city’s combined debt is currently $5,059,829 with an annual payment of $416,566. One exception is the street project.

“We’re adding the cost of the street project to the mill levee because everyone uses the streets,” City Administrator Roger Holter said.

Residents can also expect their property taxes to increase nearly $70 a year for residents with a $100,000 home.

At last week’s regular meeting, council member Jerry Dieter balked at the raises, which he believed were too high. He believed the tax increase coupled with utility rate increases the council discussed to meet the budget would be too much for some residents to handle. He proposed making a $35,000 transfer from utilities or not purchasing a dump truck this year to bring the tax level back down.

Council members Chad Adkins and Melissa Mermis, and Mayor Todd Heitschmidt too had reservations about the increases but the budget was approved unanimously.

The increase in property taxes Holter said is to pay for the current street project. The city must pay $70,000 on the project this year, a sum that was not budgeted into the 2014 budget, and the reason city reserves are being spent, Holter said.

The city’s combined debt is currently $5,059,829 with an annual payment of $416,566. Debt payments are paid for by utility revenue. One exception is the street project.

“We’re adding the cost of the street project to the mill levee because everyone uses the streets,” he said.

Utility raises will make up inflation rates, Holter said.

By raising the rates to combat rising costs, the city can stop spending reserves, build them, and use them to fund projects in-house like equipment purchases, replacement, or repair projects.

The current budget gives the city the authority to spend all its reserves, but efforts by city departments to cut spending has prevented that. Holter said continuing with department cuts will allow the city to rebuild reserves. Holter hopes to increase reserves by $1 million over the next three years.

City Clerk Woodrow Crawshaw said several bond and lease purchase payments will be finished within the next three years, allowing the city to increase reserves even more. Adkins asked if the money from the future sale of the Bown-Corby building could be used to pay off some smaller payments before 2015, freeing up that money for reserve use. If the building closes before December, the council can amend the 2014 budget to allow that.

“We can’t continue to take all the hits and not pass on the costs,” Adkins said.

Heitschmidt stressed the need to increase reserves to deal with aging infrastructure.

“We’re just starting with the fun,” he said. “We still have a long ways to go.”

He wants to raise money to replace aging sewer and water lines throughout the city.

 

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