MASON CITY – City staff has brought a proposed operating budget to the city council for discussion Tuesday night that would lower the city’s tax levy rate for homeowners by spending tort liability funds, police and fire department retirement funds as well as other retirement funds for city employees.
City Finance Director Kevin Jacobson explained Monday that the retirement funds as well as the tort liability fund are in “great shape” and that the interest gained by keeping the funds at their current high levels is negligible. He feels it would be wise to use some of the balances in those funds to help lower the tax rate, so that was a major factor in how he determined the operating budget he is presenting to the city council.
For example, the tort liability fund is at about $1 million but the city needs only $365,000 to pay its yearly insurance premiums.
Due to a state rollback increase of $27.98 per year, coupled with a decrease of $12.80 in the city’s property tax rate, the average homeowner would see a yearly tax increase of approximately $15.18.
City staff wrote in a memo that “by using reserves and the reduction in the debt service levy, the city can reduce that (tax) increase by approximately $12.80 for an increase of approximately $15.18 for a $100,000 home.”
Water rates are now slated to remain steady in the latest budget proposal for fiscal year 2013-2014 after initially calling for an increase of $15.24 per year when combined with a sanitation rate increase of $1.20 per year. The sanitation rate increase will hold.
That brings the grand total approximate yearly increase for a $100,000 homeowner to $16.38.
According to a City Hall memo, the library is also looking at dipping into reserves to balance its budget.
The same memo states that the city continues to owe over $51 million in debt.