Gladstone tax bills going up

GLADSTONE – Gladstone residents can expect to see an increase in their summer tax bill following a 3-2 split vote of the city commission Monday night to levy an additional 1.8236 mills.

Flat revenue in the general fund, a number of city projects, and a general fund budget with a $28,776 operating deficit led the city to hold a special meeting May 19 to discuss the future of city revenue. At the meeting, the commission directed city staff to determine how many mills it would take to renovate city hall, hire and sustain another public safety officer, build a new department of public works facility, replace the city’s fleet, and purchase a new fire truck. The estimated cost of the projects is $274,600 annually.

One option the city had was to approach the public and ask for a Headlee override, which would allow the city to levy the full 17 mills allowed by the city charter. This would give the city an additional 3.3215 mills or roughly $343,910.

“I would prefer to ask the public and specifically earmark the additional levy for the services we’re saying we’re running out of dollars to pay for, and at that point … we’d be able to restrict those dollars so future commissions couldn’t pilfer those dollars and use them for other items,” said Commissioner Matt Gay.

The other option, which was chosen by the commission, was for the city to levy a second millage that is authorized by the city’s charter but hasn’t been collected since 2012.

By charter the city is allowed to collect two millages, a 15 mill operating millage and a 2 mill operating millage. Both millages were reduced by the Headlee Act – reducing them to 13.6785 and 1.8236 respectively. Prior to 2012, the 1.8236 operating millage was used to pay for garbage pickup in the city.

“We were under the assumption that was for garbage collection only,” said City Manager Darla Falcon.

Believing that the mills could only be used to collect garbage, the city did not levy the millage in 2012, opting instead for a user fee charged on monthly utility bills. It was later discovered that the millage was operational and not directly tied to garbage collection.

“Most of us on the commission at the time though it was a pretty good idea, the staff did as well. In hindsight, if I had to do it over again I think I wouldn’t have reduced the millage. I think it hurt our city more than helped,” said Commissioner Hugo Mattonen.

Reinstating the millage is expected to bring in an additional $188,818 to the city’s general fund.

“If we as commissioners don’t at least levy the additional amount of 1.8236 that we can, we aren’t doing our job,” said Commissioner Dave Nemacheck.

Mayor Joseph Maki and Commissioners Mattonen and Nemacheck voted in favor of levying both the 13.6785 mills and the 1.8236 mills. Commissioners Gay and Jay Bostwick voted against the measure.

The commission also discussed the possibility of moving some of the money from the electric fund to the general fund to offset city expenses. While much of the fund is used for maintaining and upgrading the city’s electric utility to maintain profitability, the fund has been growing by about $250,000 a year.

“I think it’s crazy to have all that money sitting in the electric fund when part of the increase – I’m not talking about even robbing the corpse – part of the increase could be used for these kind of things and we’d be in line,” said Nemacheck.