Tuesday, August 27, 2013
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City hits temporary snag on utility tax

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[August 27, 2013]  At the Aug. 26 voting session of the Lincoln City Council, one of the items on the agenda was to call for a vote to implement a 4 percent utility tax on Lincoln residents.

However, at the onset of the meeting, Mayor Keith Snyder asked that the item be removed from the agenda.

Snyder explained that there had been a miscommunication between the city and Ameren Illinois, in that Ameren had sent the city incorrect information about how the tax would be calculated on monthly bills.

Snyder said the tax is calculated differently depending on if the municipality is a home rule or non-home rule community. Ameren had provided information based on the thought that Lincoln is a home rule city when in fact it is a non-home rule city.

Later in the evening, during discussion with a visitor in the council chamber, Snyder expanded on this, saying that the change will primarily affect the way the utility tax is applied to the natural gas portion of the Ameren utility bill.

At Snyder's request, the motion was made to remove the item from the voting agenda.

In the chamber that evening were three people who wished to speak about the tax. Snyder said they could go ahead and speak, or they could hold off until the Tuesday meeting this week when the tax would once again be discussed by the council.

All three chose to speak.

First to come forward was Richard Sink. Sink started coming to city council meetings when parking issues were being discussed and ordinance changes were being sought. He has been in regular attendance at weekly meetings since then.

Prior to the meeting he had spent quite a while talking one-on-one with Alderman Tom O'Donohue. When Sink took the seat to speak to the full council, he said he had learned that one thought he had on how to use the tax revenues might not be feasible. He wanted to suggest to the council that instead of selling bonds and growing deeper in debt, that the utility tax revenues be used to pay down the long-term debt the city has with the Illinois Environmental Protection Agency for the last round of sewer improvements.

He said he had just been told the sewer department has to be self-sustaining and the money couldn't be used in that manner. Snyder said that was correct; the sewer program has to be self-sustaining.

Sink said he was just very concerned that the city was going to put itself into a position where they would be so deep in debt they couldn't get out. He said he didn't want to see Lincoln become another Detroit, and with all the ideas of bonds that would have to be paid back, he could see that happening.

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Sink said in his opinion this new tax would not entice people to come to this community, but he also said, "I'm not so much anti-tax as I am anti- what you're going to do with it."

Wanda Lee Rohlfs was the second person to speak to the council.

In response to some of her early conversation, Snyder took the opportunity to further outline more of what the differences were between non-home rule and home rule applications of the utility tax.

He said the electricity figure will still be based on actual usage. But, the natural gas side of the tax will be figured on a percentage of the gross receipt in dollars. He said that at the Tuesday night meeting, aldermen will be provided a worksheet that will help them understand how the tax will be calculated.

Rohlfs also wanted to know if the manner in which the city plans to spend the tax money will be written out in the utility tax ordinance.

Snyder said it would not, because it doesn't belong in the ordinance and the expenditure of the revenue would be a decision for the budgeting process.

He also told her that the proposed use of funds he had presented to the council was really only a suggestion. The council will decide in their budget process exactly how the money will be used.

Rohlfs also wanted to know, if the city earned more than the currently projected amount, where that money would go. Snyder said again that would be a budget decision for a later date.

The final person to address the council was Cliff Marble. Marble kept his statement very brief, saying that he didn't like taxes any better than anyone else, but he agreed with the city that they had to do something about fixing some of the problems in town.

He said he would support the council and trust them to do what needs done for the good of the town.

The council is expected to rehash the utility tax at tonight's committee of the whole workshop and then bring it back for a vote in the near future.


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