Average homeowner will pay about $90 more
By Michael S. Hoey
Correspondent
The Delavan Common Council approved a 2016 city budget Nov. 17 that includes a 2.4 percent increase in the tax levy and an increase in the mill rate of 4.04 percent.
Alderman Bruce DeWitt said the tax levy is $5.5 million, an increase of about $130,303 over the 2015 budget. He said the increase is mainly a result of increases in wages for city employees and increased costs of public safety.
The mill rate is $10.55 per $1,000 of assessed property value, up from $10.14 per $1,000. DeWitt said the increase in the mill rate is because of a decrease in the city’s assessed property value and the effect of Tax Incremental Finance District No. 4. DeWitt said the average property owner in the city owns property valued at $116,500 and will see an increase of about $90 in property taxes.
DeWitt said no one on the council or city staff is happy about increasing the levy and raising taxes, but it could not be avoided. He said the strain on property taxes is a result of a continual reduction in state aid, the loss of equalized property value and the debt the city carries. DeWitt said the city has $2.5 million in debt obligation. While that figure is on the way down, DeWitt said the city still has work to do.
DeWitt said the council made reducing the city’s reliance on debt its No. 1 goal in 2012 with the target of decreasing it to 10 percent of the operating budget by adopting a “pay-as-you-go” plan for paying for projects rather than borrowing money to pay for them.
“The amount of money we pay toward debt has a huge impact on the tax levy,” DeWitt said. “I believe this (reducing reliance on debt) is the best path for the City of Delavan and its residents.”
DeWitt said a significant amount of debt will be paid off in 2018, but the 10-percent goal will not be reached until 2021. He said reducing the reliance on debt without raising taxes has been the city’s mission until now, but this increase was necessary.
“Even though we know what the end goal is, we can’t continue to hold worker’s wages, cut expenses and cut improvements to our infrastructure,” DeWitt said. “The key to success is to continue to fix roads and replace equipment without taking on more debt.”
DeWitt said some situations might force the city to take on debt. For example, DeWitt said, the city’s street department building on Richmond Road is in great need of updating and some consolidation. He said the cost of a project that size should be borrowed and spread out over today’s taxpayers and the taxpayers of the future.
DeWitt said the city and county have seen very little economic development since the crash of 2008, however hope seems to be on the horizon. He said the city has had some new housing starts and some industry interest recently.
Alderman Ryan Schroeder thanked city staff and the council for their hard work in drafting the budget and reiterated that state aid and revenues have continually decreased.
“That puts an obvious big strain on the city,” he said. “The council tries to make up the difference and still offer good services and programs and, to the council’s credit, that continues.”
Schroeder said some things he wanted in the budget did not get done, but that makes it a team effort.
“Budgets are about priorities,” he said. “Mine are sometimes different than the majority of the council and that’s OK. There are still some great things in this budget.”
Schroeder said he would have preferred to see more money in the budget dedicated to things like community outreach and communications, but he said the Finance Committee did a great job.
Alderman Jeff Johnson, who served as the chairman of the meeting as Mayor Mel Nieuwenhuis recovers from hip surgery, agreed with Schroeder that the budget is a team effort.
“We all have projects we wish we had more money for,” he said. “In the end, we have to make some hard choices.”
Johnson said no one wants to see their taxes go up and yet everyone wants the same police and fire protection and other city services.
“The bottom line is that administration, city staff and department heads, and the Finance Committee did a fine job,” he said.
