Editor’s note: City Administrator Barry Dykhuizen submitted this article.
At their Monday, July 25, 2016, meeting, the [Morrison, IL,] City Council moved to place a referendum on the November ballot. It is called the “Police Protection Levy.” The Mayor and Aldermen are very aware that the Wastewater Treatment Plant construction project is a noticeable cost increase, to many of our residents. Absolutely nobody likes how much that project costs.
Nevertheless, we still need to move forward with responsibly providing other municipal services, and–at the same time–to be sensitive to the economic impact to the Community.
Why is the City Council placing the Police Protection Levy referendum on the ballot?
It is a tool, under State law, available to municipalities, to increase revenue dedicated to Police Protection.
Police Departments are a component of a municipalities’ General Fund operations. In a typical municipality, Police Departments comprise 30% +/- of the General Fund. Other General Fund operations include Grove Hill Cemetery; Street Department; Parks and Rec; Clerk; Economic Development; Legislative; the City Hall Building.
Presently, Morrison’s “Police Protection Tax Levy” is limited by State law to a cap of .075%. This fiscal year, that tax rate will yield $39,850. However, the Morrison Police Department Operating Budget is $498,000.
State law provides that the .075% cap can be increased to no greater than .60% via voter approval.
Does the City Council want to increase the size of the Police Department?
No. The City Council has not discussed increasing the size of the Police Department. If approved by the voters, the Police Protection Tax Levy provides some relief to the General Fund, within the framework of the existing operating structure.
What is the City going to do with this revenue?
The revenue must be used for Police Protection. If levied, a portion of the revenue currently used for Police Protection could then be invested back into other community needs.
Currently, the City Council has three primary goals:
- investment in infrastructure
- restoring and maintaining fiscally-sound fund balances
- responsible maintenance and replacement of Capital Equipment.
The City’s vehicle fleet is aging. This includes squad cars, street sweeper, snow plows, dump trucks, mowers, etc. Some of this equipment dates back to the early 1990’s. In addition, the City’s cash reserves are not adequate. An adequate unassigned fund balance provides financial stability in uncertain times[. It] also preserves credit ratings for future capital projects.
How will this impact my property taxes?
Each year, the answer to this question depends on the value of your property, the City’s EAV, and the needs of the community. Here is an answer based on today’s values. If your property is valued at $100,000, then based on the equalized value ($53,161,207) and the existing tax rate of .075%, [then] $25 of your annual property taxes are designated for Police Protection.
Several existing tax levies available to cities are not capped. However, the Police Protection Levy is capped by State law at .60% by referendum. For this year, based on the example above, the absolute maximum .60% rate would result in property taxes of $200.
This is a specific property tax, the range of which in any given year could be 0.0% to .6%. It is not like a sales tax, which is the same set percentage every year.
Does the City Council plan to raise the tax to the entire .60% maximum?
Absolutely not! However, residents should be very clear to the fact that an approved referendum gives the City Council, and future City Councils, the authority to levy a higher property tax rate than what is currently allowed. The levy is one tool available to the community, incorporated into a broader strategy, aimed at creating and maintaining a financially healthy and desirable community.
What happens if the Referendum fails?
If the majority of voters do not want this tax, the City Council will evaluate other options. There is legitimate concern about the age of some of the City’s critical equipment, such as snow plows, dump trucks, and Police cars. The Police Protection Levy is viewed as possibly being one component to the solution of this problem.
What are other possible solutions to this problem?
Another option the City Council is exploring is the restructuring of existing debt. There appears to be an opportunity to take advantage of historically-low interest rates, and to place the annual savings into a reserve fund, dedicated to capital equipment needs. One restructuring option extends the debt an additional five years beyond the original maturity date. In ideal circumstances, benefits of refinancing are realized without extending the maturity date. The problem the City Council is grappling with is that the present circumstances are less than ideal.
Please contact the Morrison City Office with any questions regarding the referendum at 815-772-7657.