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Council pursues levy renewal

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Continuing a discussion they had last month about the Village property tax levy, Village Council members at their meeting Monday, July 19, voiced a general preference to renew the five-year levy at its current rate. The opinion is a shift for Council, which in a levy discussion last September, was of the general opinion that the levy should be renewed at a reduced rate.

But after looking at the budget with varying levels of levy renewal, and given the continued national and local economic slump, Council decided to play it safe. As Council member Rick Walkey stated, “the levy is a bridge to get us to a better time” until the village recovers from the loss of business and can begin to generate more revenue.

“We have a lot of services we want to provide, and it costs money,” he said. “We will be on the upswing with the college coming online, and we will be in a better spot in the future.”

Village property tax income has fallen 10 percent this year, Council member Lori Askeland said in support of a renewal at the current rate. Village manager Mark Cundiff agreed with the decision.

“We have looked at what the operational and capital cost projections are, and it appears that maintaining the levy at its current level is the best option until our income tax revenues and investment income begin to rebound to pre-recession levels,” Cundiff wrote in an e-mail on Tuesday. “As much as we would have liked to reduce the levy, we would have a very difficult time providing the same level of quality services with a reduction in revenue.”

Council has until Feb. 2, 2011 to file a request to put the levy on the ballot for May 3 that same year.

The current 8.4-mill levy provides $876,000 annually for the Village general fund, which funds police, roads and public spaces such as Gaunt Park pool, the library and parks. The levy, which will stop generating revenues at the end of 2010, was passed in 2006 by one vote. In 2007, the levy cost taxpayers an additional $256 per $100,000 of property valuation.

Assuming Village revenues remain flat and operating expenses rise 3 percent each year, by 2012 the non-enterprise fund revenue (for variable operating expenses) would be nearly $600,000 short of covering operating expenses at their current level of $2,775,000, according to the budget numbers Cundiff prepared. Adding in the capital expenses needed over the next five years, by 2016 the deficit would grow to over $1 million. If, on the other hand, the levy were approved at the current millage rate, the Village revenue fund would end 2012 with a positive balance of about $280,000, but by 2016 the fund would still come up $67,965 short. Add capital expenses to operating costs and, even with the levy, the Village would be almost $50,000 short in 2012, and by 2016, would be about $160,000 in the red.

Though Village Finance Director Sharon Potter could not attend the meeting due to illness, Council discussed briefly the possibility of reducing operating and capital needs. The police department is one area the Village might pay more for than surrounding communities, partially due to the decision to retain a 24-hour local dispatch system, Cundiff said. And the cost of road repair is likely to decline because of reduced sealant costs, Cundiff said.

But to significantly change the overall operating expenses, the Village would have to reevaluate the costs and benefits of things such as maintaining an independent water and wastewater system.

Council members agreed that they have spent the current levy money according to the public’s demands, including paying for deferred street maintenance, the pool and economic development support. And the cost of staff and volunteer time to create and train a blue ribbon committee to evaluate the budget seemed overwrought, the councilors said.

Council agreed to begin to establish a levy committee to promote the current millage rate. They will continue to discuss the issue in the coming months.

Other business covered during Council’s meeting will be reported in next week’s News.

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