City finance staff asks council whether to build two years of 3% property tax increases into biennial budget; council signals support for at least one year

City finance staff presented an information session on Feb. 3 about whether the council should build the allowed annual property-tax rate increase (an extra local 3% step beyond the state’s standard growth assessment) into the city’s two-year budget planning.

Finance staff warned that the city faces several rising, unavoidable costs — notably larger-than-expected Public Employees Retirement System (PERS) rate increases and higher health-insurance costs — and outlined a debt-reduction plan that relies on three revenue sources: a School Resource Officer (SRO) contract (projected at about $265,000), revenue from red‑light cameras (previously estimated at $250,000 but not realized this year), and proceeds from sale of the Butler property (about $245,000 projected). City staff said the principal remaining on the communication‑tower debt is roughly $1.3 million and that the municipal billing line item tied to the tower is approximately $2.70 per month per average household.

Finance director remarks and numbers: The finance presentation used county-assessed-value projections and showed that building in the 3% allowable tax-rate increase could yield roughly $724,000 more over the two-year budget window (staff noted estimates and that the precise amount depends on assessed-value growth). Staff estimated that a single year’s 3% increase would cost the typical homeowner about $19 per year (figures presented in the packet).

Debt-reduction dependencies and schedule: Staff said the debt-reduction plan is feasible only if the SRO contract is finalized, the Butler property sale completes and the red‑light camera program begins producing revenue; staff cautioned that delays or shortfalls in those items would make the plan more difficult and that proceeding without the two years of assumed tax increases would increase the risk to the debt-reduction timeline.

Public comment: Robert Seppi, a resident, urged fiscal restraint and cautioned against permanent tax increases to make up for one-time shortfalls. Seppi said the council should not use an ongoing tax increase to replace delayed or one-time revenues and noted that past councils balanced budgets without similar increases. Seppi read figures comparing historical property‑tax rates and projected rates if the city used the full allowable increase, saying the rate could approach $4.38 per $1,000 assessed value if the pattern continued.

Council direction: Several councilors said they preferred to include at least one year of the 3% increase in the coming budget and asked staff to include two years in the preliminary biennial budget model so the council could revisit the second year if revenues materialize. One councilor noted the importance of the debt-reduction plan’s goal to remove the municipal billing line item tied to the tower; another said council would reconsider the second-year increase if the new revenue sources perform as projected.

Other budget items noted: Staff highlighted recruitment and human-resources pressures, including a projected fully loaded cost for a potential HR manager hire (staff presented a $219,000 fully loaded fiscal-year figure as an example), planned police succession hiring to mitigate retirements, health‑insurance increases and other unavoidable cost pressures.

Ending: Staff took direction to build the first-year 3% increase into the initial budget and to model the second year with the ability for the council to revisit that decision when more revenue information is available. No formal vote was taken Feb. 3; staff will return with a proposed budget and options.