Ad-Express and Daily Iowegian, Centerville, IA

January 28, 2014

Higher rental permit fees?

By Michael Schaffer Managing Editor
The Daily Iowegian

---- — The Centerville City Council during its special 5:30 p.m. meeting Thursday at City Hall reviewed and discussed the projected fiscal year 2015 budget with department heads.

Fiscal year 2015 starts July 1 and ends June 30, 2015.

Centerville’s budget must be completed and submitted to the state by March 15, Patrick Antonen, city administrator, said.

Antonen took the council through the various budgets with help from department heads and budget worksheets.

The city’s total levy is projected to increase 4.76 percent for FY 2015, Antonen said. The total tax levy is projected to increase by $.84 from last fiscal year, going from $17.4882 in FY 2014 to a projected $18.3213 in FY 2015.

Antonen said for a house with a $100,000 assessed valuation that comes to a $80 per year increase.

“As of right now the budget is positive,” Antonen said. “So we do not have a deficit.”

Walmart added $5 million to Centerville’s regular actual valuation, Antonen said, going from to $188,270,933 in FY 2014 to $193,352,697 in FY 2015. Even Centerville’s agricultural actual valuation increased, going from $572,160 in FY 2014 to $722,220 in FY 2015.

Other highlights from the budget workshop:

Antonen talked about the general obligation capital loan notes for the upcoming West and East State streets and North 10th Street paving project. He said the issue date is expected to be in May, the amount is expected to be $4,495,000 with the notes paid off in 2026.

Antonen talked about several line items contained in the city’s FY 2015 fund balance projections worksheet.

One was a projected ending balance of $53,967 in the general fund. Uses for that money could include an additional code compliance officer or a seasonal parks employee, Antonen said.

The second item Antonen brought up was the projected $460,590 deficit in the water fund reserves due to costs associated with water infrastructure for the East and West State streets and North 10th Street paving project.

Several line items in the projected police budget worksheet were discussed more than others.

One was the amount of fees generated by golf cart licenses versus the cost to the city’s insurance. Golf cart license fees for FY 2015 is projected at $700. The city currently pays $800 a year in insurance for the golf carts, Antonen said.

“So either we need to get some more golf carts licensed or get them off the street,” Antonen said. “It might be something to look at in the near future because we are losing money every year on that because we are not taking in enough to cover our insurance.”

The other item in the projected police budget worksheet that caused some discussion was the school resource officer.

Councilman Rob Lind voiced his concern about the school paying its fair share of the resource officer’s salary and retirement.

The FY 2015 budget projects the school district will pay $55,889, or 75 percent of the resource officer’s salary and retirement.

Police Chief Tom Demry said the school district pays for 190 days of the resource officer’s employment. He works 40 hours per week but is off when the school is on break.

The FY 2015 projected police budget worksheet shows expenses are down by approximately $27,000 from FY 2014.

Perhaps the more controversial projected budget was the one submitted for the building department and one of its 12 revenue line items: Rental permits.

The building department for FY 2014 budgeted $2,000 in revenue from rental permits. The FY 2015 building department budget worksheet is projecting $45,000 in rental permit revenues.

Why the projected $43,000 increase in rental permits?

Currently, Centerville charges $25 for a two-year rental permit no matter how many rental units a landlord has, George Johnson, building and code compliance officer, said. There are approximately 900 rental units in Centerville, he said.

Nearby communities charge landlords $25 per rental unit per year, leveling the playing field between those with one and those with 50, Antonen said, adding it was a landlord with multiple units in Centerville and Ottumwa who first brought the idea to the attention of the city.

Antonen said Centerville is trying to follow the Ottumwa model.

Any additional money raised could go toward a second employee in the building department, Antonen said.

“That’ll allow my office to become proactive instead of reactive,” Johnson said about the proposed permit fee increase. “And right now I’m just driving around and putting out fires when they get called in.”

Councilman Jay Dillard said the city’s rental permit fee has been in place since 1961.

Antonen said he predicts more discussion on the topic and it would be up to the council to make a decision at its budget hearing. If the council makes a change it would require a change in city code, he said.

Johnson also brought up the idea the city should start charging for building inspections.

“I think the landlords, the property owners should be the ones that are actually paying for those inspections,” Johnson said, because right now it’s the residents who are covering that cost.

Councilman Ron Creagan questioned the added burden it would place on landlords and their renters. He said it should be looked at carefully before it’s adopted.

“Because I don’t want to put a hardship on a lot of landlords around here,” Creagan said, expecting landlords to raise their rent to cover the additional cost is not an easy thing to do. “I wouldn’t want to do it to my tenants.”

Johnson said rental properties exert a burden on several city departments and as such they need to help pay for those services.

“I think we need to just look at them and maybe a surcharge or whatever we can on them and you can call that inspection fee a surcharge,” Johnson said. “Because you know you’re going to have to do things to try to correct some of those problems.”

Johnson said rental properties for landlords are income and as such perhaps they should be looked at as commercial properties and not residential.

Antonen said Friday during a telephone call to the Daily Iowegian the amount of money the new rental permit charge would raise is closer to $22,500.

Another highlight from Thursday’s meeting was the council’s desire to increase the park department budget by $15,000 in order to do repairs at the Girl Scout cabin.

The idea is, if the cabin is improved, it might be seen as a local destination for a variety of events.

“We’ve had many requests to use it but right now when you go in there it’s pretty rough,” Antonen said.

The resolution passed by the council Thursday was to set the time and date for the public hearing to authorize a loan agreement and issuance of notes, something the council passed at its last regular meeting, keeping the same time and date of 5:30 p.m. Monday, Feb. 3.

Antonen said the resolution was just a formality.

The special council meeting lasted until approximately 8 p.m. The next regular Centerville City Council meeting is at 5:30 p.m. Monday, Feb. 3 at City Hall.