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WATERLOO — The city’s budget forecast has turned from sunny to cloudy as decision time looms.

Waterloo City Council members learned Monday the proposed spending plan for the fiscal year starting July 1 maintains current services but would boost property taxes by nearly 5 percent.

Chief Financial Officer Michelle Weidner said $1.56 million tax increase included in the proposed budget was a ceiling and could be reduced if the mayor, council members and staff identify spending cuts or offsetting revenue before a March 9 public hearing.

“We tend to set that high to give all of you flexibility in your decision-making process about what you want to fund and what you ultimately want the tax levy to be,” Weidner told council members.

Iowa law doesn’t allow the city to boost taxes from the published amount, but does allow cuts up until March 15.

Councilman Tom Lind noted council members voted earlier this month to adopt strategic goals calling for the tax rate to decrease an average of 22 cents per year over the next five years.

Mayor Quentin Hart questioned whether that goal was still achievable.

“We know $17.99 is unacceptable,” Hart said. “But it’s going to take manna falling from the sky” to cut 22 cents from the current tax rate.

Personnel costs represent about $1.1 million, or two-thirds, of the proposed increase in property taxes. Those include 2.5 percent raises, hiring another mechanic for fire trucks and paying to keep a firefighter funded with an expiring federal grant.

The city’s health insurance costs are decreasing on the heels of a larger increase last year, while overall pension contributions increased slightly.

Meanwhile, the city’s nonproperty tax general fund revenues are expected to drop next year, including a $125,000 reduction in gas, electric and cable franchise fees, which drives up the need for property taxes.

The proposed budget also includes using $500,000 in general fund cash reserves, the same as last year’s fund balance usage, despite Weidner’s concerns about driving that amount too low.

The published tax rate, if adopted, would boost the city’s share of residential tax bills by 4.6 percent, or about $45 on a $100,000 home, while commercial and industrial properties would see 2.2 percent tax hikes.

The difference between residential and commercial tax increases is due to a change in state rollbacks that mean a home taxed on 55.6 percent of its value this year will be taxed on nearly 57 percent of its assessed value next year. The commercial and industrial rollback of 90 percent is not changing.


Waterloo City Reporter

Waterloo city reporter for the Courier

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