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Economic impact continues

City projects property tax loss of at least $170,000 from Electrolux demolition

February 18, 2014
Jim Krajewski (jkrajewski@freemanjournal.net) , The Daily Freeman Journal

Webster City will continue to feel the impact of the loss of Electrolux in the coming fiscal year.

At Monday's meeting of the City Council of Webster City, the council adopted the 2014 to 2015 operating and capital improvement budgets. City Manager Ed Sadler said cuts had to be made in the general fund and less revenue will be available in the operating budget. As a result of the demolition of the Electrolux building, Sadler said the city is projecting a loss of property tax money between $170,000 and $200,000 in the next fiscal year.

The operating budget also includes a five percent rollback for commercial and industrial property. Sadler said he expects another five percent rollback next year.

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The council approved a request to seek bids for the demolition of the house located at 1116 Elm Street Monday night. The council established a nuisance at the property in June, 2013 and was recently awarded the property’s title.

"The outlook for next year is probably substantially worse," Sadler said

On a positive note, Sadler said the general fund and electric fund carry good cash balances. He said bonding companies and auditors look for 25 percent or more of those funds to be in cash as the city experiences a gap between the start of the fiscal year in July and when it receives property tax money in September where it needs money. Sadler said the water and sewer funds are approaching that 25 percent threshold for their cash balances.

The general fund budget for 2014 to 2015 is about $3.3 million. The electric budget is about $12 million, although the operating budget for the Electric Department is less than $2 million. The water utility budget is $2.2 million.

"All budgets are balanced. All of them have cash balances and none of the funds are spending more money than they are projected to take in," Sadler said.

In the five-year capital improvement plan, Sadler said funds include a possible land purchase for housing. However, he said additional steps would have to be taken before any land would be bought. Also in the plan, Sadler said $1 million has been budgeted for a disaster fund. In case of a disaster, Sadler said those funds would be accessible to begin repairs immediately.

"If there is no earthquake, tornado, huge flood, whatever the case may be, huge ice storm, none of the money will be spent and will roll over to the next year," Sadler said.

The city had previously set money aside in the event of a disaster, but Sadler said they had not budgeted that money before.

In other business, the council approved a request to seek bids for the demolition and asbestos abatement of a house located at 1116 Elm St. A memorandum to the council from City Inspector Jared Ruby said the city was awarded clean title to the property in January.

The council passed a resolution to establish a nuisance at the property in June of 2013. Ruby's memo said that in addition to issuing unsafe building notices, the city has sent letters to the property owner about grass and snow removal since 2006. The memo said the city's intention in acquiring the property through the court system is to clean up the property and upgrade the neighborhood.

According to Ruby, the cost of demolishing the house and disconnecting its utilities will cost between $9,000 and $12,000. Asbestos abatement could cost between $1,000 and $3,000 as well. Ruby's memo said the city can use Low-to-Moderate Income, LMI, funds to pay for those costs. Councilman Geary Meyer said the council will address similar nuisance properties in the future.

"That's a good thing to get started on," Meyer said. "It's one of more than one."

The council also approved an amendment to change the name of city demolition permits after the third reading of the ordinance. There were no written or oral objections presented. The permits are now called Utility Disconnect and Debris Removal permits.

 
 

 

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