County to increase property taxes for 2014-15
JOHNSON COUNTY– Johnson County residents will likely see an increase in their tax bills in the upcoming year, albeit a modest one.
The county Board of Supervisors held a public hearing on its proposed fiscal year 2015 budget on Feb. 25. With more than $97 million in anticipated expenditures, the overall tax levy will raise just one-half of one cent over last year’s levy for city residents, to $6.67 per $1,000 of assessed value.
Rural residents will see an increase of seven cents over last year’s levy, or $10.15 per $1,000 of assessed value, if the budget is approved at the board’s March 6 meeting.
Most residential property owners will pay more in taxes due to an increase in the state’s legislated rollback, or the portion of a property’s value that is actually taxed. Beginning July 1, the residential rollback will increase to 54.5 percent. Agricultural property rollback will be 43.39 percent, and the commercial and industrial rollback for fiscal year 2015 is 95 percent.
Under the county’s budget scenario, an owner of a home assessed at $100,000 located within the city will pay $366.75 in county taxes after the rollback is applied– about $15 to $16 more than last year– while a resident in an unincorporated area with a home valued at $100,000 will pay $552.11, or about $11.03 cents more than in 2014.
Included in the county’s budget strategy is the practice of borrowing money for certain projects to offset the loss of revenues due to Tax Increment Finance (TIF) areas designated within cities. TIF law allows governments to capture all the new taxes on properties as they are developed for a specified amount of time, instead of sharing the revenues on their incremental values with the other tax-collecting entities that would normally benefit from the developmental improvements as well.
Next year, the county will lose an estimated $5 million in tax revenues diverted because of TIF use in 10 county municipalities.
David Aschenbrenner, Johnson County Finance Administrator, said the county’s borrowing will be short-term and paid back quickly.
“We are borrowing certainly more than this county has ever borrowed historically, but we are not adding debt onto our balance sheet,” said Aschenbrenner. “At the end of this fiscal year, we will have $14,445,000 of debt on our balance sheet. Adding in that $14 million of borrowings in FY2015, but we are actually going to pay back $15.6 million, which means that at the end of fiscal year 2015, we will lower the debt to $12,830,000. We will end the year with less debt outstanding.”
While the county’s growth in valuation increased $886,000 in the general basic fund, its wages and salaries increased by $550,000. The better news is that the Joint Emergency Communications Center (JECC), the central dispatch facility for emergency services throughout the county, reduced its expenses by $315,555 this year, allowing the county to lower the JECC levy. While the county government does not have fiscal control over JECC, the Board of Supervisors does set the tax levy that pays for its building and operational expenses, based on a recommendation from the JECC’s advisory board.
“The total JECC cost for FY15 is $4,813,982. The total levy for JECC is .71 cents per $1,000 of valuation,” said Supervisor Terrence Neuzil.
Also part of next year’s budget is funding for two significant conservation efforts, reported Neuzil.
In 2008, voters approved a $20 million bond referendum, for the purpose of purchasing and protecting natural areas and making improvements to green spaces for public use. The county plans to use $1.35 million of that in fiscal year 2015.
“We’re so happy to see our conservation director and board have taken the leadership to start spending those dollars,” said Neuzil.
The county intends to use $700,000 of the land to acquire property, extending Clear Creek Trail to Kent Park and Oxford, and make $550,000 of improvements to Kent Park’s camping area, shower houses and restrooms.
“The conservation bond issue is now coming into play,” said supervisor Janelle Rettig. “Even conservation wanted a lot more money in the first year, and we said no, we need to level it out. When you think about $1.35 million in the remaining years we have eligible for the conservation bond, it will enable us to do all those projects and by using our partners like the Iowa Natural Heritage Foundation, we should be able to do all the projects we want but level out your taxes in paying for it. Fully implemented, the conservation bond will end up costing under half of what we told you it would during the campaign. You got a really good deal.”
The county will also complete several major projects and board-approved initiatives in 2015, notably replacing the Secondary Roads building that was destroyed by fire in March 2013 with a larger, more energy-efficient and better functioning facility to house its secondary roads maintenance fleet and county record storage, a project with an estimated cost of $3.7 million.
Also slated for FY2015 are several important road projects, including: replacing Mehaffey Bridge, which spans the Coralville Reservoir between Solon and North Liberty, at a cost of approximately $9 million; improvements to 2.5 miles of Mehaffey Bridge Road, a joint project with the City of North Liberty, at a cost of around $2 million; and the third phase of rehabilitation of 520th Street from Hills corporate limits to Utah Avenue, 4.2 miles of roadway that will cost about $4 million.
Neuzil noted the board logged about 40 hours of public meetings in the process, but staff spent hundreds of hours beyond that to put the new budget together.
Rettig likened the process to “making sausage, and you want to be careful if you watch it,” she said. Sometimes, elected officials and staff fight passionately over even small expenditures. Disputed items are placed in a decision package, which goes to a vote.
“You win some and lose some. The (question) is, have you lost enough that you no longer like this budget? We’ve had to say no to some department heads. They are growing so quickly, and the demand (on county services) is growing; we understand that, but the desire to hold taxes low as we can and still get projects done is always a balancing act,” Rettig said. “I think all the staff members and elected officials in this room will tell you they didn’t get everything they want, but in the end we’ve ended up with a budget the people of Johnson County should be proud of.”