Though five options for the tax levy were presented to the Geneseo City Council, aldermen voted for a sixth option, which they deemed a compromise.


Though five options for the tax levy were presented to the Geneseo City Council, aldermen voted for a sixth option, which they deemed a compromise.

The original proposals, prepared by city administrator Teresa Savage, ranged from a $0 increase, which would leave the city $35,000 short of its needed revenue, to a 9.97 percent rate increase, which would add $28,000 to the general fund.

The board ultimately voted for a 2.5 percent rate increase, following two prior votes which failed to receive a needed two-thirds majority.

At a public hearing prior to the Dec. 21 special council meeting, local residents urged the board not to raise taxes.

“Since we moved here a year ago, taxes have been raised and raised and raised. Last year, the park district (which is not affiliated with the city) raised the rate 50 percent. We were appalled,” said Barbara Miller. “The real estate multiplier increased, and there’s going to be a sales tax increase.

“It isn’t just one thing, then another. This all compounds,” she said. Miller asked the city aldermen to remember they’re not alone. “Everyone else also has a hand out.”

“Why is the whole idea to keep raising and raising taxes?” asked her husband, Richard Miller. “There needs to be cuts. If you have seven government vehicles, can you get by with six? We all have to make cuts at home.”

One of the options before the board was a 4.95 percent rate increase, which was the highest increase the council could have made without a public hearing.

Traditionally, said the mayor, the council has raised the rate by the 4.95 percent mark.

However, due to a 32 percent mandatory rate increase in the?Illinois Municipal Retirement Fund (IMRF) and a 28 percent increase in the police pension fund, “Even raising the rate by 4.95 percent would create a deficit in the general corporate fund,” said the city administrator.

However, Savage said, “We do have some options to allow a more modest property tax levy while still meeting our obligations.”

One of the suggestions was to redirect utility tax dollars to the general fund. That money currently goes into the capital projects fund.

“We’ve had the utility tax for seven years, and it’s never fluctuated more than $30,000. It’s a very stable revenue source,” said Savage.

In comparison, the general fund currently receives 48 percent of its financing from sales tax revenue. “That’s the most volatile tax. As sales tax revenue goes up or down, the general fund fluctuates,” she said.

Redirecting the utility tax would require a change in the city’s ordinance, an issue the board plans to discuss at its February meeting.

Alderman Linda Van Der Leest proposed increasing the city’s telecommunication tax rate from 5 percent to the 6 percent allowed by state law.

The increase, she said, would generate an additional $40,000, and wouldn’t come at the expense of property owners alone. All telephone owners — be it of a landline or a cell phone — within the city are charged that tax.

Citing a reluctance to place too much burden on local property owners, aldermen discussed ways the city could cut costs.

“I think there are still things we could cut,” said alderman Keith Kennett.

“We need to be looking for cuts as we operate throughout the year,” said alderman Kevin?Peterson. “We need to keep the pencil sharp on everything.”

For roughly the past decade, the city has undertaken a major capital project each year. “Maybe we need to slow down a bit for awhile and ask ourselves, ‘Can we keep a piece of equipment longer?’ or ‘Can we put off a project?’” said Peterson. “I don’t think there’s any reason to panic. We’ve had tight times before.”

Alderman Karen?West said, “I think a lot of decisions have been made in haste. We need to slow down, and I think the city employees need to take some responsibility (for making cuts), too.”
Kennett made a motion for a $0 increase to the levy. He, along with aldermen Van Der Leest, West, Lowell Ewert and Curt Spensley voted for the proposal, with aldermen Peterson, Ed Deener and Arnie Schmid voting against it. Because the measure failed to secure the two-thirds majority needed in a tax levy vote, the issue failed.

“We have to be able to meet our obligations, and there are things we need to fund,”?said Mayor Pat Eberhardt, who indicated he was in favor of a 4.95 percent rate increase.

Aldermen Deener said the council had to be aware of increases beyond the city’s control. “There’s been a 32 percent increase in IMRF, and an additional $29,000 increase in the police pension. We have no control over that, yet that’s money that comes out of our budget.”

Eberhardt said the IMRF and police pension increases, combined with the deficit the city already is facing would leave the city?“$100,000 in the hole without even starting a budget. That’s pretty tough.”

Deener said the money spent on those two increases alone was equal to?the salaries of “one-and-a-half employees.”

Deener said he wasn’t sure that the city council had the “intestinal fortitude” to make cuts. “This time, I?think the cuts are going to be people,” he said.

“I think there’s a lot of stuff out there we can cut without having to cut personnel,” said Peterson. “But we still have obligations we have to meet, and that’s the reality of it.”

“There’s no motivation like reality,” said aldermen Kennett. “You can’t tell me we can’t find some way to make up the deficit. Sometimes we have to make a statement that’s about more than a
dollar amount.”

Deener proposed a 2.5 percent tax levy increase as a compromise between those who wanted a $0 increase and those in favor of a 4.95 percent increase.

The first vote on the 2.5 percent levy increase failed, with four aldermen (Ewert, Peterson,  Schmid and Deener) voting for the measure, with Kennett, Spensley, Van Der Leest and West voting against.

“I think some compromise is appropriate,” said Deener, noting the 2.5 percent levy increase called for roughly the same amount of compromise from both sides of the issue.

“We’ve all compromised before on positions for the sake of forward movement,” he said, while asking the mayor to schedule an executive session following the council’s January meeting for the board to start discussing ways to make cuts.

Deener made a second motion for the proposed 2.5 percent levy rate increase, which makes the total levy $643,993. The issue passed with all aldermen except West voting “yes.”

The 2.5 percent rate increase is for the fiscal year which runs July 1, 2010 to June 30, 2011, and will leave the city with a deficit of approximately $20,000.