Friday, August 30, 2013
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Council heats up over kilowatts and therms

Utility tax discussions -- Part 2

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[August 30, 2013]  Tuesday evening when Mayor Keith Snyder called on visitors in the gallery at the city council meeting to speak their mind about the proposed implementation of a utility tax for the city of Lincoln, Wanda Lee Rohlfs was the first one to take a seat at the speakers table.

Rohlfs has been in attendance at the last several meetings of the council, each time addressing them with questions and concerns. She is strongly opposed to the tax.

Rohlfs had received in advance a copy of the proposed ordinance the city will eventually vote on. She said she was interpreting the rate of the tax imposed on electricity as being much closer to 5 percent than 4.

Snyder said that as he understood the tax, the graduated rates for electric usage would come out to the 4 percent. He said the city was choosing to take 80 percent of the maximum allowed on the tax, and taking into consideration all the multipliers, which vary based on usage, it would average out to 4 percent.

Rohlfs said it still appeared to her that many of the residents in Lincoln will pay more than 4 percent.

Rohlfs also questioned the pension plans, wanting to know what type of pensions these were. Snyder explained that the police and fire pensions specifically are plans where the state sets the benefit and the local government contribution. He told Rohlfs the state decides and the city has to comply. On the other hand, he said the street department pension is under the Illinois Municipal Retirement Fund, and that fund is figured differently.

Rohlfs moved on to her greatest objection to the tax: how it will be used. Rohlfs said she understands that at this point the city is saying they are going to use the money for a safety complex, to fund pensions, fix sewers and improve the downtown area. She said she trusts the sitting council to stick to their word on this. Her fear is for the future when this council may not be in power.

She said she was afraid that down the road, future councils would not spend the money as it is being prescribed now, and that concerns her greatly. She told the council that she would like to see some kind of commitment that this plan would be upheld by future councils.

Snyder said this tax was no different than any other tax in that there are no guarantees on how the money will be budgeted in the future. It will be whatever the sitting council decides is best.

Tom O'Donohue added that even if the city could spell out the usage of the money in an ordinance, which they cannot, there was nothing to prevent future councils from changing the ordinance.

Rohlfs responded by saying that was the frightening part of the entire situation.

To which O'Donohue said, "That is just the way it is."

Rohlfs moved on, asking if the amount of the tax imposed could be reduced. She suggested dropping it from 4 percent to 2 percent.

O'Donohue then said, "My question to you then would be, what do we cut? What of those things is not of value that we should cut?"

Rohlfs first wondered about the safety complex. Right now the plan provides for $10 million for a complex for both the fire and police. Rohlfs said she didn't know what was being planned, but perhaps it didn't need to be so elaborate as to cost that much.

O'Donohue said that right now the city doesn't know what the complex will cost, or if there might be grants to help. He said that wasn't really the consideration at this point. The city is looking at collecting 4 percent and budgeting its use, but if the 4 drops to 2, then something in the budget will have to be cut.

Rohlfs asked why the city couldn't spread out the expenditures over a longer period of time. O'Donohue said he didn't think that could be done, because the bond the city would issue to build the complex is already proposed as a 30-year note, and he doesn't believe it can be spread out any more than that.

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Melody Anderson joined in the discussion, saying she had concerns about outlining the use of the money for specific items, because at some point the city will have addressed all these issues. The problems will have been greatly reduced or even gone away. However, she told Rohlfs that the current list is just the tip of the iceberg on a long list of needs the city is going to have to address in the future.

She said the Illinois Environmental Protection Agency may come in and force the city to separate the sewers. She said this tax would give the city a little bit of leeway in that matter. She added: "Right now we don't even have the funds to address that if we needed to. Do you have any idea where that money will come from?"

Rohlfs responded that the city was looking at taxing the people so much that they will be saying, "We don't have the money. Where are we going to go to?"

David Wilmert spoke up, saying that months ago this tax wasn't even a consideration. He said, "My question is what we would have done with these items if we hadn't all of the sudden found out there was a new tax." Wilmert went on to say that it seemed the council was sitting there saying, "No one has a better idea, so we'll go ahead with a tax."

Wilmert said the city has a resource now in the city administrator, and he would have liked to have seen more than one option. He said his constituents were calling him, asking him not to vote in favor of the tax, and that he intended to honor their wishes. He also said he felt like the issue had been addressed backward. The city had come up with money, then designated the need for it, instead of recognizing the need and coming up with the money.

Wilmert said he knew these were important projects and tough decisions, but he would like to see another way. Anderson challenged him, saying there was no other way. She said the city cuts and cuts every year and still struggles. Wilmert responded that he realized that, but he still wanted to see the city resist a new tax as much as possible.

Wilmert went on to comment about the money that is being spent on changes in the city. He commented specifically on the addition of a public works director.

Snyder cut in on Wilmert, saying that the public works director had been thoroughly explained and that it was a replacement for a city engineer. He continued with an explanation of how that came about.

But Wilmert said he really didn't want to discuss that at this time. He said the point he was trying to make is that the city needed to examine these things and perhaps make different decisions on where to cut.

Anderson spoke again, saying that the real issues aldermen are facing now are because past councils, which included herself, chose not to address them. She added that the 4 percent utility tax would be nothing compared with other taxes the city might have to impose without it.

Wilmert said he wasn't sure the city should now tax something they had just gone through a voter referendum to try to lower. O'Donohue said that yes, they had lowered the cost, and yes, the tax would raise the total cost of electricity, but it would still be cheaper than what others are paying.

Rohlfs countered that electric rates would change, though, and that they could go up.

At that point, several aldermen were speaking at once. Snyder interrupted them all, saying that treasurer Chuck Conzo has said that the rates will go up. Snyder said, "I don't know how he has knowledge of that since our contract doesn't run out until next summer." Snyder then invited Conzo to speak.


In the next segment of this series, LDN will offer complete coverage of the discussions between aldermen, Conzo, Snyder and the visiting guests both for and against imposing a utility tax.


Council heats up over kilowatts and therms
Utility tax discussions -- Part 1

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