RICHWOOD — City Council could decide tonight whether to follow strong staff recommendation to adopt the same tax rate as the current fiscal year.
The current tax rate is 67 cents per $100 of property value.
The city will issue voter-approved debt, leaving the debt payment side of its tax rate to increase from 6.06 cents per $100 of property value to 11.78 cents per $100 of property value next fiscal year. This means the same tax total rate will bring in $10,284 less in maintenance and operations revenue, with a lower proportion of the rate going toward maintenance and operations, The Facts previously reported.
The same tax rate as this fiscal year would bring 55.24 cents per $100 of property value for the maintenance and operations side, according to previous reports.
The tax rate is 9.5 percent higher than the effective tax rate — which is the tax rate that would generate the same amount of revenue from properties on the tax rolls both years. That means it would bring $177,000 more from existing properties than the same rate did last year, Interim Finance Director John Washburn said at the Sept. 9 council meeting.
New properties would bring another $71,848, he said. Those combined would not cover the principle and interest payments of $206,000 a year from the 2019 voter-approved debt issue, Washburn said.
Council already set the maximum tax rate at last year’s rate, but it will have the opportunity to lower the rate in the future if it chooses. Council members, excluding Mark Brown who was absent, did not comment on the proposed tax rate after a hearing elicited no public comment.
Council should vote to adopt the budget and tax rate tonight, Interim City Manager Lindsay Koskiniemi said.
Also at last week’s meeting, Washburn said he has spent time reviewing the city’s water billing, but council might have to spend several years phasing in a new system to get the water bills to have revenue receipts reflect usage.
Washburn would need to spend weeks reviewing the water usage to come up with a solid recommendation for council, he said.
Washburn found weaknesses in the initial proposed water rate, which was flat and disproportionately hurt low water users, Koskiniemi said.
A tiered rate, which would charge a higher rate for more water usage, would benefit the city by encouraging conservation and bringing in more revenue, Mayor Steve Boykin said.
The proposed rate would be a preliminary inclining block design, which seeks to minimize impact on average residential use, according to meeting documents.
The rate blocks would include a zero- to 2,000-gallon usage block, 2,000 to 10,000 gallons, 10,000 to 25,000 gallons and more than 25,000 gallons, the documents state.
Council also decided to use Chris Hartung Consulting to recruit a new city manager. Three firms applied to aid in the search when former city manager Michael Coon reached out before leaving, Koskiniemi said.
They all seem equally qualified, she said, but declined to offer a recommendation because she intends to apply for the position, citing a possible conflict of interest.
It would likely be easiest to meet with Chris Hartung, since he is closest with a base in Arlington, Boykin said.
“I’ve heard good things about all of them,” Boykin said. “I think we should get someone close to us that maybe we would have a little more access to if needed.”