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Marion’s city taxes could rise 3.9%

Staff writer

Marion City Council completed its proposed 2011 city budget Friday — a budget that would increase city spending by 6.3 percent over estimated spending in 2010 and would increase property taxes by 3.9 percent.

Among the larger items of additional General Fund spending that the budget, printed on Page 11, would allow would be:

  • A 2 percent raise for city workers.
  • An estimated $48,000 to inspect and repair the city’s dike to comply with post-Katrina safety regulations of the Federal Emergency Management Agency.
  • A 15.8 percent increase ($31,502) in street and alley expenditures, mainly for concrete work to install curb cuts and ramps and to patch damaged streets.
  • A $7,500 contribution, approved earlier, to Marion Reservoir Watershed Restoration and Protection Strategies to offset expected cuts in county funding.
  • A 49.1 percent increase ($6,549) in expenditures for the city’s baseball complex.
  • A 5.2 percent increase ($4,687) in economic development funding, mainly to pay for increased city marketing.

Additional impetus for increasing taxes came from a recommendation by City Administrator David Mayfield to reduce by 26.4 percent ($70,000) the amount of profits from city electric, water, and sewer utilities transferred to the General Fund.

Under the draft budget, a larger portion of profits will remain in a separate Utilities Fund next year, rebuilding what had been a $515,633 cash reserve at the end of 2009.

The reserve, which Mayfield said was needed to pay for future improvements, dwindled to $140,978 this year after the council increased the amount of profits transferred from the Utilities Fund to the General Fund to avoid a tax increase last year.

Planned capital expenditures in 2011 include a new police car, replacing a current pickup; a new mower for the cemetery; and a used water truck, replacing one that was termed barely roadworthy.

None of these decisions is final, however. Although total General Fund spending cannot increase after the budget is approved, the council is free to redirect money within that fund to other purposes as the year unfolds.

Council members considered few cuts in the draft budget.

They discussed reducing a planned $7,500 appropriation to Marion Chamber of Commerce (already reduced from $10,000 this year) and a $17,000 appropriation to the Recreation Commission (same as this year).

However, the only cuts they ended up requesting were elimination of $1,000 appropriations to Communities in Schools and to the Housing Authority.

“What do we get for that?” council member Chris Meierhoff asked regarding the Housing Authority appropriation.

“I have no idea,” Mayfield replied.

“What’s $1,000 to them anyway?” Mayor Mary Olson said.

Otherwise, the four council members present — Steve Smith was vacationing — expressed agreement with every element of the draft budget as presented by Mayfield and formatted by City Clerk Alan Meisinger.

That is not to say that their 1 hour 45 minute work session was without discussion.

Olson asked why the city had not previously taken steps to repair a degraded weir that diverts water to the dike’s overflow channel.

Mayfield responded that money had not been budgeted to do so.

“That FEMA bunch,” council member Bill Holdeman interjected. “They’re about like the environmentalists as far as I’m concerned.”

Mayfield said that if FEMA was not satisfied with the dike, property owners in Marion’s valley might be required to purchase costly flood insurance.

Commissioners spent considerable time discussing whether the proposed Chamber of Commerce appropriation should be reduced further.

“To me this comes back to the $48,000 on that dike,” Meierhoff said. “That affects a lot of people. We’re just going to have to make some cuts somewhere.”

Olson said that if the city were to increase its development efforts, she would rather put the money in Development Director Doug Kjellin’s budget instead of turning it over to the Chamber of Commerce, which she said had not demonstrated a willingness to raise money on its own through means other than membership fees.

Commissioner Jerry Klein seemed to agree.

“We’re almost double-dutying here,” he said. “We have an economic director.”

Meierhoff said the chamber was “not really our responsibility; they’re a separate entity.”

Mayfield told the council that direct appropriations to outside groups — such as the chamber appropriation, the Marion Reservoir WRAPS appropriation, and the Recreation Commission appropriation — were a key reason why taxes would have to increase next year.

“My departments have done great on holding the line on their budgets,” he said. “We made some major cuts in some areas. When we first did this, we were looking at (a tax increase of) 10 mills.”

The draft as presented calls for an increase of 2.024 mills, or $2.024 for every $1,000 of a property’s assessed value.

Holdeman asked what effect the tax increase would have on the owner of a home appraised at $100,000.

Mayfield and Meisinger replied that they did not know. Mayfield later estimated it might be about $1.50.

Such a homeowner actually would pay an estimated $23.27 more.

A mill is $1 per $1,000 of assessed value. Assessed value is based on appraised value. Residences are assessed at 11½ percent of their appraised value — a rate lower, for example, than commercial buildings.

For residential property in Marion County, therefore, one mill equal 11½ cents of property tax per $1,000 of appraised value. If the budget is approved, the total city tax bill on a $100,000 residence will be an estimated $733.27.

During the meeting, a somewhat heated exchange occurred between Holdeman and Meierhoff, a volunteer firefighter who had not had a chance to clean up after battling a fire before the meeting.

With raised voices, he and Holdeman disagreed over how much time and effort had gone into moving fences to accommodate different levels of baseball and softball at the ball complex.

One item that will show up in budget documents filed with the state won’t actually be an expense, Mayfield said.

The city is due to make a balloon payment in 2011 at the conclusion of a 60-month lease-purchase agreement on a building it speculatively constructed in Batt Industrial Park.

“If we don’t sell the building between now and then,” he said, “we’ll refinance it for another five years — another lease agreement with the bank.”

The city is due to make $85,151 in payments on the lease-purchase in 2011.

A formal budget hearing, after which the final budget will be adopted, is tentatively planned for Aug. 23.

Last modified Aug. 5, 2010

 

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