Atlantic’s City Administrator delivered some unwanted news for residential and commercial property owners during Wednesday evening’s City Council meeting. John Lund said while figuring the preliminary Fiscal Year 2018 City Budget, which is expected to be ready by the next City Council meeting, the process by the Iowa Legislature of beginning to de-appropriate the backfill the City receives from the State, will impact property taxes significantly.
The Governor says he wants to maintain the backfill, but the Iowa House says it’s how they want to solve their budget problems right now. That means a potential loss to the City of around $120,000-150,000.
Lund says he’s had to adjust the budget. The General Fund he says, will be okay, but the Employee Benefits Fund and Debt Service Funds would both show a loss. He said also, if the City were to do another bond next year for some final street projects, we can’t afford to use Reserve Balances. Therefore, he proposes increase the tax levies 1.48-percent.
That translates to a tax rate of $13.93 per thousand dollars valuation in residential property tax, and $22.50 on Commercial property. The move he said “Would restore everything to where we need to be, and it would keep things solid, long term.”
Lund says that’s especially true with the Debt Service Fund. The employee benefits fund would end up being fine, and accommodate for growth, even though the City has had a couple of years of using the balance. But the Debt Service would actually end up going into the red in FY 2021. “That can’t happen,” he says we would eventually have to raise tax levies then anyway. “As a City, we can’t default on those.”
He said “If there was any other way to do it, that’s what I would recommend. If we didn’t have a lot of other bond projects coming up, I would just say to your we could try and weather through it but we still have some streets left that need to get done. They’re expensive streets and we’re gonna need to bond. We can’t have our latest financial statements showing losses across the board. It’s not gonna look good.”
He said if the City waits to increase property taxes until next year, it would hit your wallet even harder.