City Council freezes property taxes for commercial/industrial sectors; they head up less than 3 percent for homeowners; a dip into cash reserves, though, was needed

Commercial and industrial property owners will see no increase in the city portion of their property-tax bill in the fiscal year beginning July 1 while homeowners will see an increase of about 2.9 percent, if last night's City Council majority holds together when the budget is approved in March.

Holding the line on taxes came after Mayor Ron Corbett led the council and city staff through a tedious, line-by-line review of the city's $96-million general-operating budget over the course of two budget sessions. Along the way, a council majority made cuts to close what otherwise would have been a $2.26 million budget shortfall just to provide the same level of city services as the city does now.

The cuts, though, were not enough. The council last night also decided to shift about $1.6 million into city's operating budget from cash reserves, a move opposed strongly by council member Kris Gulick, the accountant on the council.

Gulick said the city should not use reserves to pay ongoing operating costs, and he said such a tactic was a bad business practice and one frowned on by the municipal bonding service that has given the city a top Aaa bond rating for more than three decades.

Corbett argued that the city has plenty of people on Social Security who did not see an increase in their monthly checks, and he said using reserves this year to contain taxes was the right move. The city will still have reserves equal to 31 percent of its general operating budget, which is above the 25-percent level that the city policy suggests.

Council members Monica Vernon, Chuck Swore, Justin Shields, Don Karr and Chuck Wieneke agreed to use reserves.

Gulick shot back at Corbett, saying that the city should get the budget cuts it needs from employee wages and benefits, which now consume 78 percent of the city budget, he has said.

The council toyed with the idea of cutting the proposed 2-percent salary increases for the city's non-bargaining employees, but it did not. The city's bargaining units currently are in negotiations with the city.

The council approved the addition of about eight new employees to the city's 1,400-employee work force, with five of those additions going to the Finance Department after a plea from Finance Director Casey Drew.

Drew said his 42-person staff is of a size to handle an overall annual city budget of $350 million, which has now grown, he noted, to $700 million because of the city's flood recovery. Employees work until midnight and on the weekends, he said.

“We're to the point where it's affecting personal lives,” said Drew, who sought the addition of seven additional employees.

Gulick said extra employees would help prevent mistakes. Council member Don Karr told Drew, “I've seen your car (at City Hall), Casey. I know you work hard.”

After last night's session, Corbett said, “We did our part. We put a freeze on property taxes.”

He noted that residential property taxes on the city's portion of the property-tax bill will go up only because the state rollback formula changed, and, as a result, homeowners will pay tax on 46.9 percent of the value of their home in the new budget, up from the current 45.56 percent of the value.

City Manager Jim Prosser, who had requested much more spending from the council, said last night that budget cuts would mean cuts in the services that the city delivers.