City proposes 14.47 percent increase in tax levy rate

     The City of Monticello's proposed maximum property tax levy rate for Fiscal Year 2024 was set during the Jan. 23 Monticello City Council meeting. A public hearing on the matter will take place on Monday, Feb. 20, at 6 p.m.

   "Due to increased costs across the board, we will see an increase in the maximum levy proposed for this year's budget," noted City Administrator Russ Farnum.

   The total amount is $1.9 million, with a maximum rate of $13.46439 per $1,000 of taxable valuation.

   Information on the levy rate provided to the council stated, "For over 10 years, the city has generally kept the levy rate steady, relying upon steady growth in property values to fund a slowly increasing overall levy. Due to state-mandated restrictions in commercial and industrial property valuations, a recalculations of multi-residential valuations, and overall increases in costs across every aspect of city business, both the levy and the levy rate will need to increase to meet budget demands."

   For a comparison, in FY 2023, the levy was $1.68 million, with a rate of $11.76. The proposed FY 2024 rate reflects a 14.47 percent increase.

   Farnum cited several reasons for the increase: increase in staff costs, increase in material costs, and a rise in insurance costs.

   "Not only health insurance, but a big portion of that is property and casualty insurance for the city," explained Farnum. "Increased building values due to the increased construction costs. But also increases in rates due to high losses throughout the Midwest."

   While the August 2020 derecho didn't directly impact Monticello, Farnum said financial impact is "reflected in the increased underwriting costs for the rest of us."

   The proposed levy rate is just the maximum the council can vote to set it; Farnum said they can always decrease it. The rate won't be final until the city budget is certified in March.

   State law does require cities and counties to publish their maximum levy as part of the budget public hearing notice.

   While the city will be collecting a little over $300,000 in added revenue from this increased levy rate, that does not include funding for any projects. The rate does include employee benefits and wages, as well as the city's General Fund expenditures. Also not included is the Debt Service Levy, the GO (General Obligation) Bonds. Farnum offered that the city's financial advisor is not planning to increase the Debt Service Levy beyond the $2.50 per $1,000.

   "He's functioning within the existing tax structure that we have," he said.

   Resident Tom Osborne had several questions about the levy rate, including what portion of the 14.47 percent increase represented the insurance costs. Farnum offered the breakdown on the budget would be made available by the Feb. 20 public hearing.

   "Because it's a draft budget right now, that money is spread out between departments," he offered.

   Osborne commented that "it seemed odd" that the city would know the proposed revenue and levy rate without the budget being set.

   "How can you set the maximum levy if you don't know what the budget is?" he asked.

   "Because of the public hearing and legal notice requirements," said Farnum, "we have to take a big guess at it and work backwards from there."

   Osborne asked why city departments weren't looking at cost savings within their budgets to help lower the property tax rate.

   "I really encourage the council and city department heads to consider that," urged Osborne. "This is taxpayer money; this is my money you're spending. I want to make sure it's being spent correctly."

   Osborne also shared tax rate comparison he researched of neighboring communities, asking why Monticello's is so high.

   "Are we doing something wrong?" he asked.

   Council member Wayne Peach said the one thing Osborne maybe isn't looking at with his comparisons are what each city offers in terms of services.

   "We looked at what's best for our city in the overall package," Peach explained. "One of things we look at is wages."

   Peach said it's important to pay city staff competitively or they'll find employment elsewhere that pays better with better benefits.

   "We were very cognizant about what it would cost to keep things going the way they are, maintaining our good staff, and our good programs we have within the community," continued Peach. "I think this is a good and fair way of treating everybody, our citizens, and our employees."

   He added that the council, too, does comparisons with like-communities when it comes to wages.

   "It may not be the way in which you want to do it, but we do do a comparison," Peach said.

   Osborne said he hoped these wage comparisons would also be shared with the public at budget time.

   "When I see a 14.5 percent increase in the tax rate, I think these are the types of questions that the community should be asking," he said.

   "Tom brings up a good point as far as efficiency," commented Goedken. "This has been something that has been bothering me for a while. I think there are things that we can be more efficient about."

   Goedken pointed to the Parks and Recreation Department.

   "Jacob (Oswald) and Kegan (Arduser) have done a lot of great things; they have a lot of great ideas," he said. "But part of this cost is a proposal for one added employee this year. To me, that's one area where I think we could be more efficient."

   He went on to say that if the city's property taxes "get out of line, that's the one thing people look at when moving to a community.

   "We have to keep moving forward; we want to do great things," added Goedken, "but we still have to hold the line and be comparable to the rest."

   "When we looked at the budget, we tried to cut expenses as narrowed down as we could," voiced Council member Chris Lux. "Where else do we cut? Do we cut the ambulance? Maybe one night a week we don't have ambulance service. I'm a taxpayer, too; I'm raising my taxes. We tried to do this as slim as possible."

   The council voted unanimously to set the maximum tax rate at $13.46439 per $1,000, as well as a public hearing on Feb. 20 at 6 p.m.