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Counting the pennies: Town set to listen to residents on tax rate
By Zach Markovic, zmarkovic@starlocalnews.com
Residents who want to voice their concerns over their tax rate will have their chance as the town makes its way into the final stretch of next years budget.
The Sunnyvale Town Council will hold two public hearings on the proposed tax rate. The hearings will take place on Aug. 27 at 7 p.m. and Sept. 10 at 7 p.m. The final rate must be adopted on Monday, Sept. 17 at 7 p.m. At the last town meeting the council chose to begin the discussion of the tax rate by leaving it at its current amount of $0.40792 per $100 of valuation.
Mayor Jim Phaup said that was just the beginning of the conversation as to whether there will be a change in the tax rate or not. The council is waiting to hear back from the staff on where they feel budget priorities should focus.
While property values for Sunnyvale have ticked up slowly, not seeing the same kind of bottoming out as the rest of the area, there are some growing major concerns with the infrastructure in the town and how those repairs will be paid for.
“I think we all agree to a man and woman on the council is that roads are a priority right now.” Mayor Phaup said. “Even if we do nothing else we cannot pay for all of the road projects that we need done.”
Town Manager Scott Campbell showed the council a possible budget scenario in which road priorities are met with an increase to the tax rate of $0.410516 per $100 valuation, an increase of $0.002554 cents over the current tax rate. At the meeting where they scheduled the public hearings the council directed Campbell to come back with options that do not include a tax increase for comparison.
“What I am bringing back based on their direction is a scenario that dips into our fund balance and leaves us with 120 days of operations – right now at a 166,” Campbell said. “Our financial advisor has said not to deplete the fund balance below that as to not jeopardize future debt issuance for projects like Collins road. “
Maintaining a proper fund balance is one of the criteria banks use to determine the bond rating of a town, and with a higher bond rating banks are more willing to lend out higher amounts of debt for a town to use. Campbell said with such a focus on repairing the roads in the town, there may not be a way to do so without dipping into the funds, raising taxes or possibly doing a combination of the two to meet road needs.
The initial budget Campbell presented to the council at the meeting indicated a need for $372,000 to repair the town’s roads.
“I think you need one or the other, or a combination of tax rate increase and dipping into the general fund to solve the road problems,” Campbell said. “It seemed like there was an agreement that we have to have a very healthy fund balance. [The council is] open to getting into that fund balance as long as we remain healthy.”
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