By Tony Wittkowski | Local Government Reporter | The Times Herald
Marine City is facing a $159,000 budget deficit, and looking to increase taxes on residents to balance it.
The latest proposed $2.8 million budget for the city includes a 1.86-mill increase in property taxes and a 5.15 percent increase in water and sewer rates, as well as $100 a year ready-to-serve fee for water and sewer.
The property tax increase, which would be applied as a special assessment for public safety, would cost the owner of a $100,000 house about $93 more a year in taxes. It is estimated to generate $159,000 a year.
The city currently levies 16.8707 mills in property taxes, or about $843.54 a year for the owner of a $100,000 house.
The proposed budget also includes increasing water and sewer rates by 5.15 percent. Residents currently pay $6.39 per 1,000 gallons of metered water and $5.07 per 1,000 gallons of waste produced. The city also is looking at imposing a quarterly $25 ready-to-serve fee.
Those increases would generate $1.9 million, according to Treasurer Mary Ellen McDonald.
McDonald said an average residence that uses 24,000 gallons of water a quarter would see an increase of $156.64 a year, including the quarterly ready-to-serve fee.
The ready-to-serve fee would go into the city’s water and sewer fund for major capital improvements, she said.
McDonald said the water and sewer rate increases are needed in addition to the special assessment because it would cover the city’s current operations, debt obligations and minimal capital improvements.
While the city’s savings could cover the budget deficit, commissioners have said they are against using any more of the fund. As of June 30, 2014, the fund balance was at $624,000.
Don Tillery, the city’s police chief and acting city manager, recommended the special assessment tax go into effect for five years and be evaluated by the commission annually.
“It’s up to the commission, but my recommendation is five years,” Tillery said during a Tuesday budget meeting. “It would be enough time for the economy to turn around and for our tax revenue to increase.”
Money raised by the special assessment tax would stay in the general fund to cover the city’s maintenance and operational expenses for public safety, which includes the fire and police departments. The public safety budget for 2015-16 is about $950,000.
“If we enacted the PA33 (special assessment), the city would have a balanced budget,” McDonald said. “Otherwise budgets with all departments would need additional cuts or further adjustments.”
Mayor Raymond Skotarcyzk said the tax is necessary in order to avoid cutting any more city services.
“Not everyone is willing to do what it takes to move this city forward,” Skotarcyzk said. “We can’t just keep decimating the city’s services and watch it fall apart. We either cut out more capital spending or include a special assessment levy.”
Commissioner Lisa Hendrick said she is not in favor of the tax because it takes the decision out of the taxpayers’ hands.
The special assessment levy would not go to a public vote. However, the city would have to hold public hearings before the commission could approve it.
“I can’t justify this for the taxpayers,” she said. “They don’t want to give the public a right to vote on it. Even if you do all this, at the end of the day, you still don’t have any extra money to add to your general fund.”
The only agreement so far on the budget is cutting how much the city spends on public television by half.
The commission approved Tuesday to renegotiate a new contract to reduce its contract franchise fees with CTV from $60,000 to $30,000.
CTV, a local cable company, records and broadcasts the commission meetings, community publications and athletic events such as high school football games.
Those events would still be broadcast, as the franchise fees the city receives from the local cable company would be evenly split between Marine City and CTV for their services.
Commissioners were hesitant to cut any more expenses.
“A balanced budget is good, but it would not solve a systemic problem,” said Commissioner David Simpson. “The PA33 (special assessment) would give us a way to adjust that. It allows us to address these long-term issues. Every time we have a meeting there always seems to be more problems. It’s about providing a solution.”
Marine City’s fiscal year begins July 1. Tillery said it has no timetable for when the city wants an approved budget from the commission.
(Author’s Note: This article was originally published on April 8, 2015)