Because of a pair of mandated rate increases, the Marshalltown City Council may decide to put a freeze on property tax increases to alleviate some of home and businesses owners' belt tightening.
The topic came up during a budget discussion at Monday night's city council meeting.
Lori Stansberry, finance director, said the budget calls for an increase of 9 cents in commercial and residential property taxes this fiscal year. That 9 cents is added to the per $1,000 valuation for the city portion of property taxes.
For instance, if a person owns a home worth $100,000, the taxable value - after the state rollback factor, which caps the percent the city can collect in property taxes - would be nearly $53,000. That taxable value is divided by $1,000 to get just under $53. That amount is then multiplied by the city's rate for the fiscal year. This means a person with a $100,000 home would see a $4.77 increase in his or her property tax rate, increasing the dollar amount the home owner pays from $754.40 to $759.17.
The median value of a home in Marshalltown was $95,400 in 2011, according the most recent census data. This fiscal year, the city's property valuations increased from $754 million to $792 million, a 2.1 percent increase.
Now the council must decide whether to offset the increase with $150,000, 5 percent of local option sales tax, to be used at the council's discretion. Although the city had previously earmarked the money for a pair storm sewer projects, it could opt to funnel the money into property tax reduction, negating the increase.
Using the money to freeze the property tax increase for the year would mean delaying one of the two storm sewer projects.
Lynn Couch, Public Works director, said the two storm sewer projects would provide armoring to Anson Creek to prevent any further erosion and increase the size of the storm drain at a detention basin.
Leon Lamer, at-large council member, brought up using the money to offset the scheduled property tax increase at the council's previous Committee of the Whole meeting Feb. 18. As of Jan. 1, citizens began paying an increased sanitary sewer rate, which will increase again next year. In July, citizens will see an increase in the storm sewer utility, he said.
A consent order from the Iowa Department of Natural Resources mandates the rate increases.
"Both of them we don't have hardly any control over. Somebody else is telling us we have to do this," he said. "And this (property tax increase) is something we have control over with our budget, and I thought it would be nice if we could say 'we have control, and we can hold the line, and we can make sure this year there is no increase because we know you are going to get hit with two more.'"
Bethany Wirin and Bob Wenner, at-large council members, agreed with Lamer's reasoning.
The council can still reduce - but may not increase - the rate following the March 9 publication of the budget discussion up until March 11 public hearing.
Bob Schubert, first-ward council member, said he is concerned for the citizens who property is adjacent to Anson Creek. The armoring project is important, and the city has put it off for too long already.
"I have a real problem eliminating that," he said. "The residents there have lost so much real estate over the years."
Randy Wetmore, city administrator, said that project is the less expensive of the two.