During a lengthy special meeting Monday, Feb. 24, the council put together a plan for this year's budget, which includes the possibility of raising property taxes.
According to the city if it doesn't raise taxes the general fund will be at a net loss of $213,140 this upcoming year. By doing so it can offset the costs of the library renovation, bringing the general fund net loss to only $116,000.
The library will be one of the biggest financial drains from this year's budget, the city will owe $105,673 in bonds for the building this year alone.
The money for the bonding will come from the general fund, which is primarily funded through taxes. The general fund covers expenses for the police department, library, fire department, parks and rec. department, 5 percent of city expenses and more.
The idea, when the council originally approved library renovations years ago, was to pay for the building through bonds funded from property taxes. Now that the building is finished the time has come to make this payment.
The council will vote to increase property tax from 13.85705 percent to 15.03615 percent of a $100,000 home, or $5.70 a month for a total of around $68 a year in order to cover the library portion of the general fund debt.
If the council doesn't raise property taxes, departments would need to take an even cut across the board. With already tight parameters on each department, it would be difficult for them to take the cut.
That being said, the council operated under the assumption it would receive no funding from the State of Iowa, since promised money from the state has been unreliable the past years.
In order to deplete the remaining $116,000 deficit in the upcoming budget for the general fund the council toyed with several ideas, the biggest being forgiving a loan from the general fund to the electric fund.
Last year around $140,000 was taken from the electric fund and put in the general fund in order to help purchase land for the Dutton Athletic Complex.
By forgiving the loan it would save the general fund $51,562 this year and thousands the next two years, since it wouldn't have to pay back the money borrowed from the electric fund.
Next the council discussed splitting the cost of resealing the city pool between the sewer and electric funds, a $35,000 project. The pool is in dire need of a new coat of sealant, it's already starting to lose water on a daily basis.
"If we have to borrow any money I would like to split it, just because the water is going through the sewer, so at least your dividing some of the cost, but I hate the idea of going back to borrowing money, we're already in the mess because of that," said Mayor Hartman, considering the council just discussed forgiving the $140,000 debt owed to the electric fund from the general fund.
By taking the funds from the sewer and electric budgets it prevents a loss in the general fund. However, he wants to work toward less borrowing from between funds in the future, eventually eliminating the need.
The city will also pay special attention to staffing at the pool, ensuring that the number of life guards is appropriate for the number of attendees, rather than an abundance of staff for only a few people swimming.
The council also discussed preventing the police department from purchasing a new police car this year, saving $22,000. According to Police Chief McNaul the department bought a new vehicle last year, so it wouldn't be a major loss this year.
He said he was pleased with how well the department takes care of its vehicles, giving them a longer life even though they deal with small city wear and tear everyday.
Other moves to bridge the $116,000 budgeted debt gap in the general fund include trading in three old city mowers for two brand new ones, preventing the city from having to purchase them, as well as not installing a new watering system at the Dutton Athletic Complex.
Also, outsourcing mowing to an independent party in the cemetery, allowing the city to apply its manpower more efficiently.
Finally, the council discussed putting We Lead in charge of Iowa City Area Development (ICAD). Currently it gives the organization $8,000 to help promote West Liberty in the Iowa City area.
By giving $4,500 to We Lead instead, the city will no longer pay ICAD $8,000 directly. Rather, We Lead will take charge of the dues for ICAD, only giving them the $4,500 this year.
The council will use this year to see how it's relationship with ICAD benefits the city.
The council made no official decisions during the special meeting; rather, it was a time meant to discuss all ideas out in the open.
The budget will be officially approved March 12 at 6:30 p.m. in city hall, with a public hearing beforehand.
Council debates budgetJacob Lane · Wednesday, March 5, 2014