WATERLOO — A higher tax rate and an increase in property valuations are boosting Hawkeye Community College’s tax askings by 5.77 percent for the next fiscal year.
The board of trustees on Tuesday gave preliminary approval to a 2018-19 budget estimate that includes $9.92 million in property and utility replacement tax collections for the college’s 10-county service area. That is $541,359 more than in the current year.
“This does increase the property tax rate a bit,” said Dan Gillen, Hawkeye’s vice president of administration and finance. The overall tax rate would rise 4.5 cents to $1.01 per $1,000 of taxable value. In addition, he noted, property valuations have grown by about 1 percent across the service area.
Board Chairman Jay Nardini pointed to a trend of declining enrollment and minimal increases in state funding. “While nobody likes to see taxes going up, unfortunately with the Legislature doing what it’s doing and declining enrollment we still have to pay people,” he said.
A home with an assessed value of $100,000 will see an increase of $1.30 in the Hawkeye portion of its annual tax bill, going from $55.27 to $56.57. That assumes the home’s valuation remains the same.
“We’re a small portion of a person’s tax bill,” said Gillen, generally between 2.5 and 3 percent for Black Hawk County residents.
The tax proposal is part of a $65.58 million budget estimate for the fiscal year starting July 1.
It will return to the board in February for a public hearing and final approval. The budget represents a $5.45 million decrease from the re-estimated budget for the current year, largely related to bond funds being spent this year on construction of the new Adult Learning Center.
“There’s a lot of estimating going on,” said Gillen, noting state funding levels and tuition are not yet set.
“The only thing this really does is set the property tax rate.”
The budget assumes level enrollment and the restoration of state funding that was deappropriated during fiscal year 2017.
All sources of state funding are estimated at $16.71 million in the 2018-19 budget. Tuition is estimated to generate $20.3 million. Additional anticipated revenues include $6.58 million in federal aid, $2.5 million in proceeds from certificates and $5.49 million in other income.
Expenditures include $7.87 million for liberal arts and sciences, $17.77 million for vocational and technical education, $5.07 million for adult education, $6.94 million for cooperative programs and services, $1.86 million for administration, $4.46 million for student services, $925,124 for learning resources, $13.3 million for the physical plant and $7.38 million for the general institution.
In other business, trustees approved the sale of $9.5 million in general obligation bonds to Piper Jaffray of Minneapolis at an interest rate of 1.83 percent, the lowest of 10 companies bidding on the bonds. The company is paying $9,541,375 for the bonds. “That means they were willing to give you a $41,000 premium,” said Maggie Burger of Speer Financial, which handled the sale.
The college will pay $498,106 in interest on the bonds over five years for a total repayment of just under $10 million. Voters approved issuing $25 million in bonds in February 2015 to be repaid with property tax levy revenues, and $6 million in bonds were previously sold.
The money funds the Adult Learning Center, now being built, and future construction of the Health Sciences Technology Center.