City Council eyes property tax hike

Mayor Mike Gonzales inspects damage to a self contained breathing apparatus as part of background information provided to justify a requested fire department equipment purchase Monday evening. The first draft of the city’s 2017-18 fiscal year budget proposes a $979,446 annual operating deficit.

Bruce Baker/McCook Gazette

McCOOK, Neb. — The McCook City Council hadn’t approved an increase to the city’s property tax levy in more than a decade prior to last year’s bump and could be asked to approve another increase this year, depending on what happens with assessments.

Monday’s budget hearing provided City Council members with a first look at the proposed 2017-18 city budget and capital expenditure requests. Detailed departmental reviews of the budget provided by several city department heads indicated expenses continue to increase, equipment continues to age and revenues continue to fluctuate.

Sales tax revenue is anticipated to decline by some $30,434 for the year, however, city leaders are budgeting for an increase of $241,191 from property tax revenue. City Manager Nate Schneider said he definitely anticipated a greater portion of the property tax increase to come from assessment adjustments, rather than any potential bump in the levy, however, city leaders wouldn’t know for sure until final assessment numbers were received from the county. He anticipated that to occur the day of, or the day following, first reading approval of the city budget which is scheduled for Aug. 21.

The $241,191 proposed property tax increase is more than twice the $99,433 increase yielded after City Council bumped the levy last year. The 2017-18 proposed budget anticipates $1,390,000 in General Fund property tax revenue, following a 2016-17 projected year end of $1,148,809.

Proposed budget highlights include an across the board employee wage increase of 2.4 percent, in addition to merit and longevity increases; a 16.5 percent increase in the General Fund Health Operating Transfer, now totaling $527,400 annually and stemming from health insurance issues; and $75,000 increase to the General Fund reserve, now totaling $800,000.

Community Betterment Funds stemming from keno revenue is on the decline. “Keno revenue is going down a little bit. That’s an important thing because it’s used to fund a position on the fire department side. We need our gamblers to gamble,” said Schneider lightheartedly.

The Water Department continues to be flush with cash-on-hand and after providing an internal loan to other departments last year another is planned this year. Last year’s approximately $300,000 loan came from the city’s water department enterprise fund and was earmarked for $216,210 in expenditures scattered between the street, cemetery, parks and ball park departments, as well as for the purchase of a second police vehicle. Schneider said this year city staff was proposing to borrow $450,000 from the water debt reserve.

The proposed General Fund budget requests $979,446 more in expenditures than is available in budgeted revenue. “It’s about $975,000 short of the requested budget. These are items we will have to replace now or in the future,” said Schneider. He later said city staff wanted to provide the best service to the citizens of McCook but continually cutting needed equipment purchases or repairs was making it difficult for the city to continue to operate.

Schneider indicated changes to the proposed budget were likely in the coming weeks. “Over the next three weeks, we’ll maybe be able to come up with some ideas,” he said.

Capital expenditures in the budget total $298,840 including $2,500 for the administration department’s Problem Response Team; $3,000 for City Council’s Vision McCook; a $5,000 transfer into a police officer disability fund; $55,000 to purchase two new police vehicles; $15,000 to replace fire department masks; $32,000 for fire department radio replacement; $10,000 for fire department turnout gear; $15,300 for a ambulance defib/cardiac monitor lease; $45,000 to replace an ambulance; $107,000 to replace Civil Defense outdoor warning sirens; $3,240 for new radios for the street department; and $5,800 to purchase two lighted windsocks for the airport.

City staff is proposing $400,000 in sales tax receipts for street improvements; with $604,013 for the final Municipal Center bond payment; $40,000 for drainage improvements; $10,000 for an electric gate opener at the airport; and $5,337 in uncommitted receipts.