By PETER HUSSMANN
A proposal to implement a 27 cent "emergency levy" to fund initial enactment of the City of Newton's new Comprehensive Plan has been dropped from next fiscal year's budget.
Newton City Administrator Bob Knabel had suggested in his budget proposal discussed by the Newton City Council on Monday that the "emergency levy" be added to the 15 cent levy increase needed to fund next year's city operations. The funding was proposed to show the city had skin in the game when it came to implementing the citizen-led initiatives for the future of the community.
At its meeting Monday, council members were supportive of instituting the provisions included in the Comprehensive Plan but showed some reluctance in sourcing that funding through an "emergency levy." In order to implement it, the city would have had to gain approval from a state board overseen by the Department of Management, the State Treasurer and State Auditor.
Council members asked whether its use, after enactment, could be changed in the future should new scenarios arise, especially considering the Governor's push to make changes to the commercial and industrial property tax codes. Though the state is promising to backfill potential funding losses local governments would see by lowering those tax rates, past history locally (elimination of the Machinery and Equipment Tax statewide to entice Maytag to build its Neptune washer line in Newton rather than Herrin, Ill.) has shown the state money is not always fully forthcoming.
City Administrator Knablel laid out for the council today a proposal on how Comprehensive Plan projects could still be financed from existing funding sources and without the need for the "emergency levy."
So here's how it works. As suggested by council, the projected ending fund balance of 26.3 percent would be lowered to 25 percent, a percentage that will keep bond rating agencies happy and would also free up $102,000 in additional revenue.
Further, the city staff plans to use the council consensus call for reducing expenditures for re-instituting the City Newsletter, city hall cosmetic upgrades and new audio and video equipment for the city's public access cable television channel, as well as transfering $30,000 from the General Fund for entryway signage to the Whirlpool fund bringing to a total of $162,000 that could be available for financing the Comprehensive Plan. The 27 cent "emergency levy" would have generated approximately $120,000.
But it goes on. Instead of purchasing an unmarked police car next fiscal year, financing would used to purchase a second marked police car, a net increase in the budget of $13,500. That would reduce the available funding to $148,500. In addition, the $8,000 needed for irrigation system at the soccer fields could be paid through available funds rather than through bonding. Now the amount is down to $140,500.
Of this amount, city staff is recommending that $83,000 be transferred to the Whirlpool fund account, money the world's largest appliance manufacturing corporation left the city for community betterment projects after it pulled out of the community. The city has used it judiciously over the years and by transferring that amount to the fund, a total of $250,000 would be available for future Comprehensive Plan projects.
The $57,500 remaining could be used for city hall improvements or the audio-video equipment, but only if needed and approved by the council. The money would remain in the ending fund balance, which would kick that percentage back up to 25.9 percent.
Under the new plan, Newton's levy rate next year would jump 1 percent, from $14.99 per $1,000 valuation to $15.14 per $1,000. For a homeowner with an assessed value of $100,000, that would result in a $38.87 increase in the city's portion of the property tax, $799.64 versus $760.77. However, without the state's decision to increase the residential rollback by the maximum allowed 4 percent for the coming tax year (52.8166 percent versus 50.7518 percent), the proposed levy increase for the $100,000-valued Newton homeowner would have resulted in only a $7.61 city property tax increase.
The Newton City Council will discuss the budget recommendations when it meets in regular session on Monday.