City given 2 tax levy hike options

The Vandalia City Council was presented on Monday two options for the city’s new tax levy, each of which calls for a substantial increase in the total levy.
And, while a levy with a large increase will be approved, the impact on residents’ property tax bills will be significantly lower.
Dale Timmermann of Timmermann and Co. Ltd., the city’s auditor, presented to city officials at Monday’s council meeting one proposed levy with a 21.85-percent increase and one with a projected increase of 12.34 percent.
In each case, the increase is due solely to the city’s obligation to adequately fund its police pension fund.
The 2015 tax levy total was $704,600, and the proposed levies presented by Timmermann include totals of $902,452 (21.85-percent increase), with the police pension fund figure increasing from $258,605 to $420,458, and $831,995 (12.34-percent increase), with the pension fund amount increasing to $350,000.
The police pension fund figure, Timmermann told aldermen, “reflects how much money you need to set aside” to meet its obligations to the city’s police pension fund.
And, he said, “This is not unique here.” Mayor Rick Gottman told aldermen, “Most munipalities are facing this same thing (with its police and fire pension funds).”
The proposed increases are derived by the city’s actuary and the state’s Department of Insurance, and the proposed increase for the latter as presented on Monday is only “what I guess (it) might be,” Timmermann said, adding that he hopes to get an actual figure from the state agency in time for the Dec. 19 meeting, at which the council must approve a new tax levy.
Alderman Andy Lester asked Timmermann whether the large increases are a result of the city’s return on investments, and Timmermann said, “It certainly is a factor.”
Up until about a year ago, Timmermann said, the city had investments in short-term certificates of deposit with interest rates below 1 percent.
“That’s what has killed us,” Alderman Jerry Swarm said.
Other factors in the city’s obligation to the pension fund include the number of police officers and the age of those officers, Timmermann said.
In recent years, Timmermann said, the council has chosen to increases proposed by the DOI, resulting in smaller increases in property taxes.
And he explained that while each of the increases are significant, they don’t reflect the increases that residents will see in their tax bills. He estimated an increase of 2-2½ percent, or “probably a similar increase to last year.”
Also at Monday’s meeting, the council approved an ordinance amendment that lifts the restriction on the number of temporary liquor licenses that a liquor license holder can seek to cater events at locations other than their place of business.
These temporary licenses are for such things as wedding receptions and special events in the community, Gottman said.
Ryan Connor of Burnside, Johnston, Connor and Jensen told aldermen that the city could create a catering license, but that “seemed unnecessary.”
The alternative, he said, was to amend the existing ordinance, which limits a liquor license holder to two temporary licenses annually.
“The ones we have (available) are going unused largely because of the restriction,” Connor said, explaining that liquor license holders currently have to pick and choose which events it caters off-site each year.
The ordinance amendment approved by the council states that the city has not had any applications for two types of temporary licenses in the past four years.
In other action on Monday:
• Aldermen approved the list of council meeting dates for 2017 and the city’s list of holidays.
• Talking about the exterior wall of a building that was exposed when the city demolished two buildings at the northwest corner of Fifth and Gallatin streets last year, Alderman Andy Lester asked, “Is the city powerless to do anything to clean that up?”
Any effort to address such an issue, Connor said, would have to “be directed toward health and safety. If there’s a safety issue, that we can control.”
Lester said that before the demolition of adjacent buildings the wall in question was an interior wall. Now, he said, it’s an exterior wall and needs to be modified to handle the weather.
Gottman said that the owner of the building in question, Dennis Grubaugh, had sought to receive Tax Increment Financing assistance from the city to address that issue, but was unable to do so because he “wanted to do it himself.”
The city’s TIF guidelines require that applicants for TIF assistance have to include two bids with their application.
As this wall, and other, similar walls on buildings in the downtown area, were discussed, Lester said he would like to see if the city can come up with a way to address this kind of situation as it arises.

Leave a Comment