DeKalb City Council leans toward tax levy freeze

DeKALB – The city council moved forward Monday with a tentative consensus on a 2018 property tax levy that would ensure homeowners’ taxes won’t go up unless their property has been assessed at a higher value in the past three years.

During Monday’s Committee of the Whole meeting, Molly Talkington, city finance director and interim city manager, presented the council with the most up-to-date overview of three tax levy options.

Option one is to stick with current policy and levy the full dollar amount. The second, recommended by the Finance Advisory Committee, is to use other stable funding resources to levy the tax. The council is leaning toward the third option: to stay with the same tax rate and capture projected growth in full.

“It’s frustrating to go through this every year,” 1st Ward Alderman David Jacobson said about the tax levy process. “The reason is because we’re acting outside of our existing fund balance policy.”

Jacobson said the current policy is “best practice” and would use the entire levy, but “the reality is it’s effectively impossible without a massive tax increase that I think would be very difficult to sell to the community.”

He added that while he thinks residents should be paying more taxes for services required in the community, he would “certainly support” giving clear direction to the FAC and council regarding policy change that allows growth to be captured each year.

The FAC-recommended option would collect pilot money from the city’s water fund – captured through charges to water bills – which is currently being funneled into the general fund, and include caveats for the pilot money to be used for the city’s pension fund.

The logic for that option is that the city has other, more stable revenue sources to help pay for pension funds, as well as address the city’s budget deficit, which sits at $1.67 million.

Fifth Ward Alderwoman Kate Noreiko said the FAC should be better utilized, and cautioned against tying the city to any policy for a long period of time.

"It doesn't account for any potential emergency situations – though
I realize in some ways we're in [one]," she said.

Mayor Jerry Smith addressed ongoing concerns from residents regarding tax increases.

“Believe me, I hear that,” he said. “But I’m also looking at the deficit, and I’ve had more people around the community say, ‘We can’t cut here, we can’t cut there,’ but we need to address the deficit.”

The council moved forward with consensus to pursue the third option, pending further discussion that could involve researching ways to combine the second and third options. Talkington will take the council’s consensus on the third option back to the Finance Advisory Committee, which meets at 6 p.m. Wednesday, and will bring any FAC recommendations back to the council for next Tuesday’s budget workshop.