Fifth straight year: City share of tax bill stays steady

The City of Clear Lake’s tax asking is expected to remain at $9.70 for fiscal year 2021, provided there are no changes following a public hearing March 16.

City Administrator Scott Flory explained that last year the Iowa legislature passed Senate File 634, which requires cities to pass a resolution to adopt the fiscal year maximum property tax dollars.  The legislation requires cities to approve, by resolution, the amount of tax dollars for the fiscal year budget prior to approve the final budget.  The resolution was passed by the Council and that hearing was held Monday.

The usual overall budget hearing will be March 16, in the Council Chambers.

The proposed city tax rate of $9.70 per $1,000 of assessed taxable valuation represents the fifth straight year the city’s share of the tax bill has either declined or remained constant.  

For fiscal year 2017, the City tax rate decreased from $10.54 to $10.04; for fiscal year 2018 the tax rate dropped to $9.80; and for fiscal year 2019 the tax rate went to $9.70.

“The taxable valuation for the 2021 fiscal year continues the positive trend of growth in the community,” explained Flory.  The table valuation for fiscal year 2021 is $694,814,674, which is a $40,824,330 increase (6.3 percent) from fiscal year 2020.  “This is despite a commercial, industrial and multi-family residential rollback,” added Flory.  The residential rollback for fiscal year 2021 is set at 55.07 percent, which is a decrease from fiscal year 2020’s rate of 56.92 percent.

The City’s proposed fiscal year 2021 budget reflects total expenditures among the various programs of slightly over $20.2 million, of which $8.8 million is directed toward operations and maintenance, $10.6 million toward capital and roughly $900,000 to debt service.

The projected ending cash balance for June 30, 2021 in the General Fund is $4,047,398, which is roughly 52 percent of the General Fund operating budget, according to Flory.

“The single largest source of revenue for the City is, of course, the property tax.  The property tax is based on the value of property owned.  In fiscal year 2021, property taxes will represent roughly 30 percent of total revenues,” said Flory.  

The City’s Constitutional debt limit for fiscal year 2021 is $56,674,350 and the City currently has used only 8.2 percent ($4,634,500) of its General Obligation borrowing capacity, which is one of the lowest levels of debt in the State of Iowa. 

“Generally, municipal finance advisors suggest operating in the 60-70 percent range,” Flory said.

The proposed tax rate of $9.70 was the fourth lowest tax rate in the State for fiscal year 2020 for cities with a population greater than 4,000.  

The recommended tax rate of $9.70 per $1,000 of taxable valuation would result in a tax bill for City government services of $767 in 2020-21 for a residential property with an assessed valuation of $150,000 (with Homestead Credit).  

Following its public hearings, the City expects to certify its budget to the County Auditor March 24.

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