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The new fiscal year is only a few days old, but the Centerville City Council, unhappy with the budget passed a week ago, is already shaping some major changes, including another tax increase.

The council will hold a July 19 public hearing on a proposal to add another 1 percent franchise tax increase to generate funds for street and park improvements.A 1 percent increase in the city's franchise tax on electricity, natural gas, telephone and cable television service will generate an additional $46,000 next year, City Administrator David Hales estimates.

The council Tuesday voted to amend the just-adopted 1988-89 budget to put $35,000 of that into sidewalk and street projects and $11,000 into a master planning fund for park improvements.

But the council is also looking at reducing the increased water rate it also just passed, from $2.50 to $1.50 per residence per month, pending an overall study of the city's water rate structure.

That study, the council conceded, could result in rates going up again if it determines the city is falling behind in keeping its water fund self-sufficient, including putting funds aside to expand and refurbish the system.

The council held numerous public meetings and work sessions on its budget in June, rejecting a proposal by Hales and Mayor Dean Argyle to increase the city's franchise tax from 3 to the maximum allowable 6 percent, in addition to imposing the franchise tax to the water system and upping water rates.

The money would have gone for public works projects, part of a six-year plan the mayor and council drew up earlier this year to improve the city's roads and streets, water delivery system, parks and recreation facilities and other public works projects.

The compromise budget passed June 21 increased the franchise tax from 3 to 4 percent, allowing only a few of the projects and prompting second thoughts among some of the council members who feel the city needs to make improvements now while they are less costly and land, especially for parks, is still available.

After passing the budget, the council set up a special meeting three days later to review what they did, deciding to increase the franchise tax by another percent. But council members cut the water rate increase back from $2.50 a month per household to $1.50 per month.

Cutting the water rate will cost the city $30,000, Hales estimates. The deficit can be made up partially by funding two water line projects from the water fund rather than the capital improvements fund, he suggested to the council, and by reducing the depreciation reserve.

The city estimates an average Centerville resident paid $50.39 last year in franchise taxes on gas, electricity, telephone and cable TV service. Under the budget passed in June, upping the tax one percent, that would have gone up $1.40 per resident this year.

But by adding another percent on, that will increase to $2.80 per resident next year, or between $15 and $16 per household, according to council estimates.

But by knocking $1 a month off the water rate increase, the council believes it can soften that impact, putting the monthly tax increase at $4.30 per resident instead of $3.90, still under what it would be - $5.30 per resident per month - with both the franchise tax increase and full water rate increase.

The new tax rates, according to council estimates, translate into a $51.60 total increase in what residents will pay in taxes to the city in 1988-89.