 During those tours, police Chief Ken Greenslate and his staff and
fire Chief Mark Miller explained the drawbacks they face in working
in their current locations.When the tours were over, the council
convened in chambers for their regularly scheduled committee of the
whole meeting.
At the onset of the meeting, discussion quickly turned to the
city's proposed implementation of a utility tax. A guest, Wanda Lee
Rohlfs, asked to speak to the council on the subject.
Rohlfs said she had questions she wanted to put out there, and
the council could, if they chose, address those questions when the
utility tax discussion came around on the evening agenda.
However, as Rohlfs posed her questions, Mayor Keith Snyder and
others responded immediately.
Rohlfs began by asking about the aggregation contract the city
has with Integrys, as well as the Ameren rates. The contract with
Integrys will expire in midyear 2014. Rohlfs concerns were that in a
year, the city may see rates go up on aggregated electricity, and
Ameren customers could also see increases next year. She wondered
how that would affect the tax.
Mayor Keith Snyder explained that next year when the time is
appropriate, the city will search out the best possible price on
electricity and enter into a new agreement. He said yes, that rate
could be higher, but no one knows now. It could also be lower.
Melody Anderson also noted that the tax would not be based on the
total dollar amount of a utility bill. It will be based on actual
usage.
Rohlfs asked what kind of hardship the city thought a utility tax
would place on the residents of Lincoln who were on a fixed income
and also on business owners.
Snyder asked her to define hardship.
Rohlfs said she wanted to know what the tax would add to a
utility bill. She said for example, on an average bill, would it
come to more than $30 a month?
Snyder said it wouldn't even come close to that amount. He noted
as an example, if the bill were $100 a month, 4 percent would be
only $4.
Chuck Conzo, city treasurer, asked for clarification of what is
being taxed at 4 percent.
Sue McLaughlin, city administrator, said it would be 4 percent of
the total therms a customer used in a month.
Tom O'Donohue added that the customer will not be taxed on the
fees that are tacked on to the utility bill, but only on the usage
of actual product: natural gas or electricity.
On Wednesday, after the meeting, Snyder responded to a question
about the tax and how it would be calculated as follows:
(Copy)
To clarify on the utility tax itself -- it is a usage tax, not a
tax on the price of the fuel. For example, the ordinance the Council
will be voting on calls for the imposition of a tax of four cents
per therm of natural gas. (The rate per kWh is a bit more convoluted
because of Ameren's complicated electrical rates, by it also breaks
down to so many cents per kWH used, making it roughly that 4%
figure). Thus, with the tax being imposed on a per-therm and per-kWh
basis, the City will not be capturing more revenue with any increase
in the price of fuel. Any fluctuation in revenue will result from
fluctuations in total usage of natural gas and electricity.
Rohlfs' final question to the council was whether the group had
exhausted all other possibilities for raising the money to fund a
new safety complex.
Melody Anderson said she had received a letter from a constituent
regarding when the county determined to build the current Logan
County Safety Complex and how they had managed to do that and to pay
for the building in a short period of time. Anderson said the letter
did not provide specifics about how they did it. She had been trying
to gather more information but so far had not been successful. She
said she was still in the process of trying to find out what they
did and if their solution could be a viable solution for the city
now.
[to top of second column] |
As it happened, Dan Fulscher of the Logan County Emergency
Management Agency was in the room, there to present an update to the
city on his department, which is partially funded by the city.
As Fulscher sat down at the speaker's desk, he said he had the
answer Anderson was looking for. The county had built the current
safety complex using federal and state grant funds and money from a
long-term rental agreement with the city.
He said the grants the Logan County Building Commission received
were federal grants that are no longer available, so that is not a
viable option for the city.
In addition, he said the commission had entered into a 20-year
agreement with the city of Lincoln for the rental of space in the
complex at $500 per month and that the city paid in advance, thus
enabling the county to pay for the complex.
The meeting moved on to other topics, then returned to the
utility tax later in the evening when Snyder shared with the council
a plan he called "Rebuilding our Foundation."
Snyder prefaced the discussion by saying that the city was in a
situation where they were having to deal with issues now because
former councils had not dealt with them in the past.
He said he didn't want to see Lincoln become another Springfield.
He was referring to the problems the capital city is now facing with
funding their city pension plans. Snyder said Springfield is in so
deep they don't know how they are going to get out of the mess they
are in.
In Snyder's plan, the city will implement a 4 percent utility
tax, plus earmark the revenues from video gaming to be used for four
specific projects.
Snyder provided to the council a handout showing the revenues
that could be brought in and the manner in which the money would be
spent.
On the revenue side, the 4 percent utility tax would bring in
$1,334,300 per year and the gaming proceeds would be an estimated
$60,000, for a grand total of $1,394,300 per year in additional
revenue for the city.
On the expenditure side, the city would issue a $10 million bond
to be paid back over the next 30 years for the construction of a
safety complex. The annual bond payment would be $600,000.
A $2 million bond would be issued for downtown improvements such
as the city streetscape plan and utility improvements. The annual
payment on that bond would be $250,000.
A second $2 million bond would be issued for sewer system
upgrades, and again the annual payment would be $250,000.
Finally, $294,300 would be paid annually to the police and fire
pensions.
After some discussion, Snyder asked that his plan be placed on
the voting agenda for next Monday night.
The council agreed to have it on the agenda, and it is expected
that the vote will take place. However, the council has the right to
table any item they feel they are not fully prepared to vote upon.
___
This concludes a summary of the council's discussions on the
utility tax. In part two, LDN will provide a more detailed look at
the discussion during this part of the meeting.
[By NILA SMITH] |
