Vacanti proposes property tax levy for fiscal year 2023-24
The Red Oak City Council held its first hearing on the proposed property tax levy for fiscal year 2023-24.
Interim city administrator Al Vacanti spoke about the levy during the regular city council meeting Feb. 21. Vacanti said Iowa Gov. Kim Reynolds signed SF-181 to make a correction of the pages to the valuation calculation. The bill signed by Reynolds addresses an error in property tax rollback numbers.
Vacanti said it was undetermined how the new legislation would affect the city’s budget, however, Vacanti said cities that had published posted notice of hearing for the max levy had been instructed to continue with the hearing as scheduled.
“This will reduce the taxable valuation available to be taxed against. Tax dollars requested will either be allowed to remain the same as published, or will be forced to decrease due to maximum rate caps on individual levies. We are at the 8% to 10% maximum cap, so I'm crossing my fingers, but I have a feeling we’re going to see an additional reduction from what we were able to enjoy this year in terms of general property tax,” Vacanti said. “If the property tax rate must increase over what was published on the max levy notice to generate the same dollars published on the notice, this will be allowed to the extent that maximum individual levy rate caps will allow.”
Vacanti said Montgomery County Assesor had until March 9 to go back and re-evaluate and reassess the properties. Vacanti expected it would have an impact on the city’s budget before the city could post notice for a final hearing. The deadline for the final hearing to approve the budget has been moved back to April 30.
“This will buy us a little more time to determine the numbers and where they go on the budget forms. However, we'll probably see an additional loss in revenue. Probably about 2%,” advised Vacanti.
A public hearing was opened to discuss the levy. No oral or written comments were received. The council then moved to a resolution for approval of the maximum property tax dollars for the fiscal year ending June 30, 2024.
“Just based on the numbers, it’s about a 4.5% increase over the numbers from last year regarding the levy. The tax rate for last year was $15.93 per $1,000 valuation to $16.89 per $1,000 valuation for next fiscal year. FICA and IPERS costs and employee benefits can be levied, so that's part of where the increase comes in,” Vacanti explained. “I would also say you’re still staring down the barrel of 8-to-10% inflation rates, so you're looking at a 4.5% increase. There's also some anticipated staff hires and inflation costs are leading the charge for that.”
The council approved the resolution for the maximum property tax levy for fiscal year 2023-24.
The council also approved an updated memorandum of understanding between Vacanti and the City of Red Oak for interim city administrator services. Under the new terms, Vacanti's duties were extended through May 10, or ending two weeks after a new city administrator started their duties with the city of Red Oak.
Councilperson Brian Bills praised Vacanti for all of his efforts to assist the city in recent weeks, and all Vacanti brought to the table while serving in the position.
In other business, the council:
• Approved the appointments of Kylie Bowen and Debbie Terry to the Red Oak Library Board.
• Approved the Red Oak Library Board’s request for a liaison from the Red Oak City Council. Councilperson Tim Fridolph was named as the liaison.
• Approved setting a wage of $20.25 for Evan Drake in the Red Oak Street Department. Drake had completed his probationary period.
• Approved an advertisement for the open position of accounts payable clerk, due to the hire of Christie Vanderholm as Red Oak city clerk.
• Approved a memorandum of understanding regarding employment terms for William Bates as a senior patrolman with the Red Oak Police Department between the City of Red Oak and the International Brotherhood of Teamsters Local #238.
• Approved a hiring recommendation for William Bates as senior patrolman for the Red Oak Police Department.
•Approved hangar lease agreements for Josh Trail, Big Sky Beech LLC, Bryan Easton, and Jeremy Clark, per the Red Oak Airport Commission's recommendation.