Iola grapples with money matters

A cascade of issues pertaining to Iola’s budget — nearly all of which carry a growing price tag — leaves City Council members with some weighty decisions in the near future.
Council members set an Aug. 11 budget hearing to review the city’s 2015 spending plan, which if approved, will bring with it a 6-mill increase for local property owners.
The proposal was startling enough to prompt Mayor Joel Wicoff to say it caused him “heartburn” to consider.
Meanwhile, the Council directed City Attorney Bob Johnson to draft a sales tax question for local voters in the November General Election. If approved, a portion of an additional half-cent sales tax would support construction of new elementary and high schools.
City Administrator Carl Slaugh also told the Council that Iola’s water and wastewater rates should be examined in the near future to generate needed revenues for upkeep and maintenance, although no specifics were mentioned.
And while those issues are fresh in everybody’s minds, the Council will decide soon on a proposal to increase employee wages over the next three years to put Iola more in line with other municipalities.
Elsewhere, city council members delayed any action on making up a projected $377,000 budget shortfall for its countywide ambulance service, choosing instead to await word on whether Allen County commissioners will provide further financial assistance. (See related story).

THE HIGHER mill levy is necessary, Slaugh said, to alleviate several issues regarding the city’s 2015 budget.
For example, the city’s estimated assessed valuation is forecast to drop from $31.2 million this year to $29.75 million in 2015, or about 5 percent.
Slaugh pegged the lost valuation in recent legislation that allowed local industries to reclassify some pieces of machinery and equipment, making it tax exempt. The lower valuation would cost the city about $50,000 if the mill levy remained static.
The higher levy would permit the city to continue its chip and seal maintenance program, Slaugh said. A portion of the funds this year came from sales tax revenues transferred from a capital outlay fund.
The Iola Public Library’s budget has been strained in recent years because of ongoing upkeep of the Flewharty-Powell Annex. Because of the lower valuation, property taxes dedicated for library operations will drop from $210,000 to $201,000, Slaugh said.
And while the city’s water fund no longer operates at a deficit — rate hikes approved in 2011 helped end that shortfall — Slaugh said the city needed more funding to sustain regular maintenance and pay the bond debt for water plant construction.

SLAUGH’S recommendations: Bump the city’s ad valorem tax levy from 38.7 mills to 44.7 mills; increase transfers from the electric utility; review water and sewer rates; and, if local voters give their blessing, increase the sales tax.
Council members set the budget hearing for 6 p.m. Aug. 11 at the New Community Building at Riverside Park. There, local residents are welcome to share concerns or questions about the spending plan. The city’s 2015 budget must be submitted by the end of August.
Wicoff urged council members to consider three issues when setting the city’s budget:
1. Each year, the Council is asked to provide funds for charitable causes from time to time. “We need to figure out how to budget for these, or not accept these cases. We need to figure out a procedure. There’s not an endless supply of money.”
2. While state and federal grants have been a boon to the city in the past, some also carry a price tag requiring a local match. Iola should be mindful of local obligations to determine which grants the city accepts in the future.
3. Wicoff noted the higher mill levy breaks from tradition. Iola’s levy has been in the mid 30s for years, he noted.
“That’s been a source of pride,” Wicoff said. “This is very atypical.”
A 6-mill increase would mean the owner of a $100,000 home would pay an additional $69 in property taxes.

THE SALES tax issue will be tied to a proposal to build a new elementary and high school for USD 257. The city sales would go from 8.4 percent to 8.9 percent. Chanute’s sales tax is 8.4 percent, Garnett, 8.15 percent, and Humboldt, 8.65 percent. Both Parsons and Pittsburg’s sales taxes are 8.9 percent.
Superintendent of Schools Jack Koehn asked the city in June to consider floating the sales tax issue before voters to help supplement costs. School board members are in the midst of preparing a related bond vote in November to fund much of the proposed $49 million construction project.
Koehn told the council last month that if the city provides a portion of its sales tax revenues — a quarter-cent — it would substantially mitigate the potential property tax hikes.
Council members directed, with a 4-2 vote, to have City Attorney Bob Johnson draft the proposed sales tax question for final ratification.
Johnson noted a provision could be inserted to nullify either the sales tax or bond issue question if the other was rejected by voters.
Councilman Jon Wells said he favored the measure, but wants assurances a new school would be built in or near enough Iola so it can provide utilities.
“Otherwise, we’re just paying them to move,” he said.
“I’m always reminded of a Greek quote here, ‘A society grows great when old men plant trees in which whose shade they know they’ll never sit,’” Wells continued. “And that’s the way I feel about building schools. Even if you don’t have kids, it’s one of those things you just have to do. You have to build new schools. And apparently in Iola, that’s every 100 years.”
Franklin, conversely, said a higher sales tax would hurt local merchants, particularly because Iola’s tax rate would be higher than either Chanute’s or Garnett’s.
Franklin said a local car dealer told her Iola’s sales tax rate makes it difficult for them to sell cars.
“I cannot vote for it because I think it’s bad for our merchants,” Franklin said. “If I was going to buy a $30,000 car, that’s another $150.”
Joining Wells in favor of putting the sales tax to a vote were Don Becker, Bob Shaughnessy and Nancy Ford. Sandy Zornes joined Franklin in voting against.
Councilmen Steve French and Gene Myrick were absent. Myrick is recovering from surgery, and visited briefly with the council over the telephone from the hospital at the start of Monday’s meeting.