City proposes holding $15.91 tax levy for next fiscal year

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BY CHUCK VANDENBERG

PCC EDITOR

FORT MADISON - Despite several hours of crunching debate and a smorgasboard of ideas, the Fort Madison City Council is looking at keeping the city's tax asking static to 2017.

The City Council, along with all city department heads, met Monday in Council Chambers to listen to a budget proposal from City Manager David Varley.

The 2016-2017 fiscal year rate was $15.91050/$1,000 of assessed valuation and the proposed 2017-2018 FY budget is set at $15.91020/$1,000. The proposed rate will generate $4.059 million in property taxes for the city.

"Technically it did go down just a little, but since no one's going to really notice it we don't have to spend a lot of time on it."

The city will be taking a hit in some of its funds however and corrections are being proposed to lessen the burden on the general fund, which Varley said is struggling to keep pace.

One of the funds is the Grant Opportunity Fund which was being fed by an annual $300,000 payment from the Catfish Bend Riverboat, but the lease expired in March and the revenue source is now gone.

The fund was used for items such as contract services, grant matches, capital projects and transfers to the general fund. It also funded entities such as Lee County Economic Development, Main Street, RSVP and SEIBUS.

"These dollar amounts to these groups aren't huge dollar amounts, but I don't want anyone to think I just glossed that over," Varley said.

"I am proposing in this budget that we reduce our commitment to the LCEDG to $25,000 from $50,000 and Main Street from $10,000 to $5,000." Varley said.

City Finance Director Peggy Steffensmeier said this year is the last year in the city's commitment to the LCEDG, but Varley said there is language in the agreement that permits the city to step it back if they are having budget issues.

Another issue that drew quite a bit of discussion is a $6 million Quality of Life Bond.

The bond was issued to pay for street improvements and city park improvements and by the end of the 2018 fiscal year those projects will be completed with the exception of one project which is the dock and amenities for use by Vikings Cruise Lines. The fund will continue to hold $100,000 for the project.

"If the city ever bonds like this again, I hope we have a better plan," said Councilman Rusty Andrews. "We've used this as, and I hate to use the word, but a slush fund of sorts. But this Viking thing is way out there. Is it worth holding back 100 grand?"

Varley said what they are talking about is a stripped down version as opposed to highly developed riverfront.

"It goes back to the intent of the bond issue," Andrews said. "And I think there's a better way to spend that money."

Also at issue was a pending deficit at the new depot when that is moved.

"Currently Amtrak pays $0 for rent at the current facility. So for us to even get rent from them was a lot of work. But if we can look at that from the tourism side, then the general fund may not take a hit," Randolph said.

Randolph said the city subsidizes a lot of businesses through incentives and tax increment financing, or TIF, projects.

"But this is going to be around for all of us when we're gone and we're gonna leave this for future councils. David's done a good job of shrinking (Amtrak) down I think because they had big expectations first." Andrews said.

"From the first agreement to what we have now we're in a much better state than we were." Randolph said.

"I'll be honest with you, I don't know how much we're gonna see from people getting off the train. Best case scenario is the train is four hours late and people need to get something to eat. But the more ways you have for people to get into town, the better off you are. If you start closing that off you kind of shut that down."

The mayor put the blame for the delay on Amtrak.

"We are way past where we should be on this project. They're terrible negotiators I think," he said. "This project was pretty much dead in the water and the costs have increased because of the time involved. When you look at what we've spent to get where we are... I don't think we'd ever get where we need to be."

Regarding the sales tax fund, Varley is projecting the city will start the next fiscal year with $7 in that fund, with projected revenues of $1.477 million with expenditures calculated at $1.531 million causing a shortfall of $54,390.

The Hotel/Motel Tax Fund, money contributed to city coffers from a tax added to all hotel and motel stays in the city, was also discussed. The city contributes 9 percent of that revenue to the Fort Madison Area Artists Association and 9 percent to the North Lee County Historical Society. There was discussion among the council to reduce the 9 percent to 7 percent to offset budget deficits.

Council member Travis Seidel said that the city needs to take care of its own house before they can take care of others.

The revenues have been increasing with the construction of the Iowa Fertilizer Company with workers staying at local hotels, but Randolph said that money could start to dwindle as the plant comes on line. But he said Boulders is doubling their size and that could help stave off some of the decreases.

The budget is not finalized. City staff will include any changes and then the budget will have to go through a public hearing and be approved by the city council at a future city council meeting.

budgets, city council, city of fort madison, community, fort madison, politics

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