A public hearing on the city of Decorah's budget was set for 7:45 p.m. Monday, March 3, during the Decorah City Council's meeting Monday night.
The proposed budget raises the property tax rate 10 percent to cover debt payments for two major projects - the extension of water and sewer service along Highway 9 to the Decorah Business Park on the east edge of the city and the purchase of a new firetruck. It's the first time in five years an increase has been sought.
The proposed rate increase is $1.25 per $1,000 of taxable value for a total tax rate of $13.79 per $1,000. The current property tax rate is $12.54 per $1,000 of taxable value.
City officials are planning to bond for $4,015,000 to pay for the water and sewer improvements, a project that's been planned for nearly 10 years, according to City Manager Chad Bird.
There are currently eight buildings in the business park served by a small well and individual septic systems. Once the extensions are built, water lines will connect to a water tower constructed in 2008 but not yet operational, and sewer lines will connect to the municipal sanitary sewer service.
Bird reported he would be meeting today, Thursday, with residents of the Downing Addition east of the city off Highway 9 about the utility extension project and its time schedule.
The city and the Decorah Rural Fire Protective Association are splitting the cost of the truck, which s bonding for its half of the truck, $335,000.
Bird said the utility project has a 15-year debt payment schedule, and the firetruck loan will be paid off over five years. However, the city manager is hopeful the utility bonds can be paid off sooner through tax increment finance proceeds generated by increased property values in the business park.
Bird provided Council members with clarifications requested following last month's five-hour budget workshop.
They included the amount it would cost to pave the park shop road around the kiln south and west of Phelps Park in concrete rather than asphalt. Bird said it would cost an additional $7,500 for a total of $37,500.
Council member Tade Kerndt asked which project - asphalt or concrete - would be included in the budget. Council member Paul Wanless, chair of the Council's budget and finance committee, said the Council would need to direct the city manager to add the additional expense for concrete.
Wanless said the concrete would stand up to traffic on the road.
"I think it would be worth the extra money," Kerndt said.
Kerndt made a motion to possibly pave the road in concrete that was unanimously approved by the Council. That allows the additional expense to be budgeted, but it doesn't mean the Council is obligated to have the road paved with concrete.
"You don't have to spend it," Rustad commented.
Once approved, the budget is the maximum amount the city can spend, but the Council has the option to spend less than the amount approved.
Rustad noted revenues for 2014-2015 budget are projected at $13,701,354, while total expenses are projected at $13,732,321 a difference of $31,467. Bird said the difference between projected expenses and revenues are due to use of fund balances, grants, capital funds or a split in fiscal year for projects.
The difference comes out of the city's reserve balance, Wanless said.