Monticello increases fees, not taxes
A proposed property tax increase in Monticello was not passed after a large crowd attended the August 11 meeting of the Monticello City Council.
After two hours of discussion, Councilmen Brad Randall, Walter Bird and Jeremy Hoggard voted against the tax increase and the issue died. The council then unanimously approved the certified tax rate for 2009-’10.
The council was proposing the property tax increase to deal with a budget shortfall of $74,000 for the coming year. The proposed increase required a truth in taxation public hearing. Many residents expressed comments and concerns about the proposed tax increase.
City Manager Myron Lee pointed to three factors to explain the shortfall: a significant drop in sales tax revenue (down $50,000 from 2008 to 2009); overspending for several years (expenditures $350,000 more than revenues); and inflation.
“It’s just costing us more to do business,” said Lee. Lee added out that property taxes are not adjusted for inflation, and said, “These are hard economic times. People are not spending the money that they used to spend and that’s just a fact of life.”
Mayor Doug Allen added that resort community tax laws were changed by the State and Monticello no longer qualifies for the tax. Allen said that the City went 13 years without adjusting the certified tax rate and the current mill levy is lower now than it was in 1995.
During the public hearing, Bob Turri told the council, “Raising taxes is not the answer to your problems. It’s an easy out, but it’s a temporary out.”
Turri asked the council to look for waste within the city and make the necessary cuts, as hard as they may be “We may not like it, the public is not going to like it, but we’re going to have to live with it,” said Turri.
Many residents who spoke against a tax increase agreed that there needs to be more cuts made and volunteer work may be needed so the city can cut in more areas.
The general sentiment was one of willingness to serve, that the spirit of volunteerism is alive and well in Monticello. Mayor Allen praised the efforts of volunteers, pointing specifically to city recreation programs which would not work without volunteers.
When the tax increase failed, the council was left with the task of seeking other ways of balancing the city budget. The council had until the end of the meeting to present a balanced budget to the State Auditors office.
After the initial budget was prepared, each department cut their budgets by 10 percent. Lee said that some departments were unable to make cuts as it would require cutting employees or programs.
The council discussed at length a proposal to increase secondary water rates by 50 percent. Public Works Supervisor Nathan Langston discussed the secondary water system with the council.
The base secondary rate is $8.40 per month and use is not metered. Langston said several properties in the city do not have secondary water, but have a 50,000 gallon credit on their culinary water bill.
Estimating water use, Langston said city users pay about $0.07 per 1,000 gallons, “which is pretty cheap water, I’m sure by anybody’s standards.”
Langston said that the conservancy district fill station sells secondary water for $3 per 1,000 gallons. He added that there are many items that need to be discussed in the near future on the secondary water system, including meters, connection fees, and fair billing.
City Manager Lee said that the water department owes the general fund $365,000. Mayor Allen said that the department never caught up from the drought and the expenses incurred making sure the community had water.
Councilman Randall said that a change in secondary water rate is still a tax on the citizens. Councilman Bird countered by stating, “We live in the West and water is at a premium. Even at a 50 percent increase, it is still pretty cheap water when you start looking around.”
Randall said he is more comfortable with a 25 percent increase and to make up the difference from a fund balance or the sanitation fund. He added, “We should not rely on the citizens to balance the budget upon their taxes on their back. We ought to, as a governing body and as a council, live within the means that we are given.”
Mayor Allen agreed that no one likes increased taxes, but pointed out that the City has only two taxing entities to fund government, a limited amount of sales tax and property tax. “The other that we have is the rates on services we provide. I don’t think we have been doing what we should there... but other than rates, there is no other way we can fund the city,” said Allen.
Randall motioned to increase secondary water rates by 25 percent, but it failed for lack of a second.
Bird followed with a motion to increase secondary water rate by 50 percent. Hoggard said the council should allow people to opt out of the secondary water system. The motion passed 3-2, with Randall and Hoggard voting against. The water rate increase will take place on October 1, 2009.
With the increased rate, the city had an additional $32,426 in revenue, leaving a shortfall of $41,600.
Councilman Bird suggested cutting $3,000 from the Parks and Beautification committee budget, and increasing recreation fees to raise another $3,000.
The council also revised sales tax projections, which they said were too low, adding $20,000 in revenues. Councilman Hoggard suggested cutting the budget for code enforcement legal fees. Mayor Allen was concerned that it would send the wrong message to the public about City commitment to following codes.
Hoggard suggested cuts to the travel and training budget. City Manager Lee suggested that the travel and training is necessary for city staff, but some training could be cut. The possibility of rescinding a $5,000 commitment to the Big 4 tractor building was discussed, but the council did not want to take back money they had promised. The council also cut $1,000 from the Welcome Center budget.
With a remaining shortfall of $20,600, Councilman Scott Shakespeare suggested that they balance the budget using fund balances, and to revise the budget later in the year. Shakespeare said that as the year goes on, they could cut budgets to make up the difference.
City Manager Lee suggested taking funds from the Class C Road Trust because it builds up rapidly. The trust recently had a $380,000 infusion of money borrowed for the mountain water project.
Until 2004, the council chose to leave the road money in an interest-bearing PTIF account that earned $30,000 and $60,000 a year in interest.
Councilman Scott Frost suggested taking from the sanitation fund rather than hurting the Class C Road Trust. Frost said it is a disservice to take money from the PTIF funds.
Councilman Hoggard said they did not get in the current budget situation in just the past year, and if they need to take some money from the PTIF to “get back on our feet, we still have more than we had this time last year.”
After a great deal of discussion, the council approved suggested changes to the budget, including taking $20,600 from the sanitation fund to balance the budget. Councilmen Randall and Hoggard voted against the motion.
After many weeks of discussion regarding survey requirements for building permits, the council had two failed motions before Councilman Frost moved to require surveys for building permits on all new construction on vacant lots in commercial, residential and industrial zones. The motion passed 4-1, with Councilman Walter Bird voting against.
The issue may return in the future, as several Councilmen said that some additions, including garages, should also require surveys.
Assistant City Manager Ruth Skouson reported that airport construction is moving along as scheduled. The current project involves moving dirt and preparing a level runway, as well as installation of culverts. The next phase is a base course as well as paving and utility work.