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City tax rates stay level, but tax bills may rise in 2021

Officials look at different options to offset impact of property value increases

Some Webster City residents may see a higher property tax bill for fiscal year 2021, but likely not from a tax rate increase, according to Webster City City Manager Jeff Sheridan.

Over the past year, Hamilton County has done a reassessment of property values and some homes have increased in value, by as little as five percent or as much as 25 percent.

“That’s a pretty significant jump,” Sheridan said. “If everything else stayed exactly the same, there would still be many folks with a higher tax bill, but it’s more to do with the property being worth more than the tax rate.”

Sheridan, along with Webster City Finance Director Dodie Wolfgram, is looking at different options to help offset the impact of those property value increases for property owners.

One option presented to the city council is to use part of a surplus in a city fund usually used for payroll and benefits, while also keeping the tax rates the same as they were in the previous fiscal year, Sheridan said.

“So if somebody has a $100,000 house, and if they fell into the 25% increase, their old valuation was $55,000, now it’s going to be $68,000,” he explained. “Their old city tax would be $895, now it’s going to be $1,118, so an increase of $224. If we can take some of the surplus out, that will lower that $1,118. It will still be more than $885, but it won’t be as high.”

Sheridan warned that if the city council does choose to go that route, it will be a “one-time thing,” to dip into that surplus like that.

During a Feb. 10 budget work session, the city council discussed the capital improvement plan section of the budget, including the 2020 Second Street Reconstruction Project and others.

Aside from the infrastructure improvements, another main budgetary item from the general fund will benefit the city’s parks.

“We’re doing more parks and recreation improvements this year,” he said. “Everyone acknowledges that’s an area that perhaps had not had the investment necessary in the past.”

The Webster City City Council will have another public work session to discuss the FY21 budget proposal at 6 p.m. on Monday at City Hall.

During this work session, the council will discuss the city’s capital equipment plan, which may include items like a new vehicle for the fire department.

Two other departments were looking to each purchase a mini-excavator with this next budget, but Sheridan plans to help them find a compromise and find a piece of equipment that will work for both their needs.

“All department heads have been very good at working with each other,” he said. “It’s just connecting the dots. It’s my job to look at what everybody needs and see where I can find areas where we can either share equipment or reduce their requests and still allow them to accomplish their jobs.”

Overall, the city’s operating budget for FY21 is expected to be “very similar” to the previous year, Sheridan said.

“Dodie and her staff do a very good job,” he said.

With upcoming major infrastructure projects like the Second Street project and the water treatment plant project, the city pays attention to the context and tries to make as little as a financial impact on its citizens as possible, Sheridan explained.

“It’s important to understand that if we’re asking our rate payers to pay more for sewer and water, then that puts added pressure on making sure that the tax rate doesn’t have to go up at the same time,” he said. “I think it’s really important you have to look at the entire fiscal picture of the city.”

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