New construction, changes from non-exempt status absorb increased collections
By Michael S. Hoey
Correspondent
The Delavan Common Council approved its 2017 budget on Nov. 15 with a tax levy of $5.6 million and a mill rate of $10.55 per $1,000 of equalized property value.
The tax levy was higher than the 2016 figure of $5.5 million but the mill rate was almost identical. City Administrator Denise Pieroni said the city had several multi-family building changes from exempt to non-exempt, and new construction was up, which allowed the city to keep the mill rate almost even with this year’s rate.
Alderman Bruce DeWitt, chairman of the Finance Committee, thanked city staff for the hard work put into crafting the budget. DeWitt said the themes over the past five years have been to hold the line on tax increases without adding additional debt. Despite those financial constraints, DeWitt said the city has worked hard to continue to make things in the city better with road improvements, equipment and other operational ideas.
“All of this has been to make Delavan a better city,” DeWitt said. “This is not an easy road to take, but, in the end, it is the best way to make Delavan financially strong.”
Dewitt acknowledged the slight tax levy increase, though he stressed it was slight and that taxes should remain about the same because the mill rate did not go up. DeWitt said the city has been working to pay down its debt. DeWitt said the debt is down to $12.7 million from $22.3 million in 2012. Despite that success, DeWitt said the payments on the debt have not gone down and continually put stress on the budget. He said the city should see some relief from those payments at the end of 2018.
DeWitt said the city has been much more efficient in recent years. Efficiencies include sharing services with neighboring communities like the police department contract with Darien, which he said has been a huge success. He also said city departments have been sharing staff, which has made those departments more efficient.
Challenges that DeWitt said face the city include how to use room tax dollars. DeWitt said the state Legislature passed new rules that have forced the city to change how it uses those funds. He also said the rule changes are not in the best interest of the city’s poorest residents or the city’s street-repair program.
“They made rules to punish a few (municipalities) who weren’t obeying the rules, and, in the end, they end up punishing everybody,” DeWitt said.
DeWitt also said the public works garage on Richmond Road is very outdated and must be addressed soon.
“I believe the city is moving in the right direction,” he said. “It just takes time.”
Alderman Ryan Schroeder, who also serves on the Finance Committee, identified two other challenges facing the budget – tax assessments of property value and state aid to municipalities are down.
“It does get challenging,” Schroeder said. “The Finance Committee and the council, as a whole, have certainly done a great job with the resources or tools they have been given to keep the budget in line and still offer the good programs and services we depend on.”
In a budget overview submitted to the council, Pieroni said $370,000 of general fund money would help cover operational expenses that exceed the levy and non-levy revenue sources in 2017.
Commission gets advance
The council addressed the concern DeWitt expressed about tourism dollars by approving an advance of $78,000 to the new Tourism Commission. Pieroni said that as of Jan. 1, the city can no longer directly spend room tax dollars on tourism or tourism development projects as a result of legislative changes. Instead the city must use a separate tourism body. To that end, the former Room Tax Advisory Board, which was a city committee, was replaced with the separate Tourism Commission on Oct. 11.
Pieroni said the new rules reduce the amount of money the city can retain and use for other things like capital improvement projects, though the first payments of 2017 will go to the city for those types of projects. The Tourism Commission will not get any funds until third-quarter room taxes are due Oct. 31. She said the $78,000 advance is necessary so the commission can operate, market and promote tourism in the area.
Once the commission is able to establish its own revenue-distribution cycle, the advance would then become available for the city to use for other marketing or tourism projects.
TID #5 base value reset
The council approved a resolution to amend the project plan for Tax Incremental Finance District No. 5, which covers the downtown area, to allow for the re-determination of the base value of the district.
Todd Taves, financial advisor from Ehlers and Associates, said legislation was passed about three years ago that allows the value of a TID to be re-established one time in recognition of the recession that caused property values to plummet beginning in 2008. Taves said the value of TID No. 5 when it was created was $24.7 million. The value now sits at $21.8 million, meaning the next $2.9 million of property value increase will generate no tax increment for the city.
Taves said the city can re-establish the value of the TID at the lower amount as of Jan. 1 and then any increase in value from new construction of property rehabilitation in the district would lead to tax increment for the city going forward.
Ambulance contract
The council approved a one-year contract extension with Curtis Universal Ambulance Services, doing business as Medix, to provide the service through Dec. 31, 2017. The current contract expires on Dec. 31. The council agreed to pay $11,200 per month for the service, a $200 increase.
