Finance committee skeptical of mayor’s tax-reduction plan
Mayor Derek Slaughter had a hard time selling his idea to cut next year’s proposed $29 million budget by a half-mill, by using half of the account reserved for repairs to City Hall.
Last week, City Council asked Slaughter to find $434,000, or 0.5 mills of property tax, by cuts or by augmenting the city budget before Thursday’s council meeting.
Slaughter and Joseph Pawlak, city interim finance director, did that by coming up with a plan to take half of the $850,000 out of the account reserved for City Hall repairs, including accessibility improvements for the disabled community.
Slaughter offered the proposal to council’s finance committee Tuesday.
Over the course of two council meetings the city council and administration whittled down a proposed tax hike to 1 mill. One mill generates $860,000.
That’s $100 more on a household assessed at $100,000, which still was unacceptable to council in a year when COVID-19 ended jobs, stopped business privilege tax revenue and shut down most income from city programs and services, including special events in the recreation department
The administration wanted to take $300,000 in rent and another $150,000 out of the City Hall account, leaving $400,000 in it, Pawlak said.
It didn’t resonate with the consensus of the committee and its chairwoman.
“Given the massive amount of work contemplated to bring City Hall up to standards or move City Hall, I am exceptionally uncomfortable to use money like that,” Councilwoman Liz Miele, committee chairwoman and council vice president, said.
Slaughter said the plan he proposed “buys the city time” to determine how much and what method it would need if the intent of council is to borrow money to pay for various city improvements next year.
Miele said the suggested borrowing discussed was putting money into Bowman Field and potentially Memorial Park pool, because of historically low interest rates.
Councilman Adam Yoder was opposed to the administration’s plan and asked the mayor and Pawlak what the starting balance of the City Hall account was listed at.
“It’s $850,000,” Slaughter said.
“I appreciate the effort, but would prefer to see it as a secondary measure,” Yoder said.
Councilwoman Bonnie Katz said she was not comfortable reducing the account to $400,000.
Councilman David Banks also was appreciative to the mayor and Pawlak for the idea but expressed apprehension of “spending out of savings.”
He also said the decision hasn’t been made to fix City Hall or move out of the building.
Banks also reminded his colleagues the city would face increased costs next year, including pensions and health care. “We need to tighten our belt, so to speak,” he said.
“In fairness to the administration we asked them to come up with $434,000 and make it logical and make sense,” Council President Randall J. Allison said.
He said the city could keep street reconstruction money in and not drain it.
“Generally, I’m not in favor of taking away from streets, but we would be in a year when the city has done so much repaving,” Allison said.
He cautioned those on the council and the administration to not make knee-jerk decision to address the proposed tax increase and at same time strategize to put pieces together and pass a budget.
“If we go into a year without a budget the city shuts down and can’t spend any money,” Allison said.
He noted how the council and administration were in a compressed time frame before the holiday but said there are solutions.
Other potential ways to increase income is to review the city subsidizing River Valley Transit through trash collection, street repair, and tapping into income it derives from holding vast amounts of land and making improvements to its fleet and natural gas-related business ventures.
“I know that will take longer then the year’s end but we need to look hard and quickly as we can at this potentially neglected way for the city and River Valley Transit to manage revenue streams more effectively,” Miele said.
While the committee isn’t the council as a whole, it appeared it seemed moving toward a vote on council to use the existing $125,000 of natural gas impact fees and get a commitment from the administration to reallocate $309,000 in prior year natural gas impact funds in City Hall in exchange of removing $434,000 from the City Hall capital fund.
The city has $450,000 in natural gas money previously earmarked for street reconstruction; $200,000 of it for the levee recertification and $50,000 for mitigation of Grafius Run flooding, Pawlak said.
The committee also sought from the administration further details on the city debt as part of the budget reduction.
The council meeting is scheduled for 6:30 p.m. Thursday on Zoom technology. City residents can go to the city website and follow the prompts to watch it on YouTube.
The remote meetings were ordered by the council and Slaughter as a means of preventing spread of COVID-19 and following the state Department of Health and Centers for Disease Control and Prevention guidelines.