Pensions hike tax rate in Kingsford

By JIM ANDERSON

News Editor

KINGSFORD – Kingsford’s city government tax rate will climb by 0.356 mills – an increase of 1.6 percent – under a proposed 2014-15 fiscal year budget.

A public hearing is scheduled for 6:30 p.m. Monday at city hall.

The proposed new rate is 22.352 mills. The increase is due to a rise in the levy for police and firefighters pensions, which will go to 3.435 mills, up 0.352 mills. The pension millage is based on actuarial calculations and certification by the Police and Firemen’s Pension Board.

The rest of the city levy breaks down as follows:

– 17.222 mills for the general operating fund, the same as the current rate.

– 1.195 mills for the public works facility debt service, an increase of 0.004 mills. This millage is based on an amortization schedule and reflects a bond refinancing that cut the interest rate from 4.75 percent to 2.7 percent on May 1, 2013.

– 0.5 mills for city roads and streets, the same as the current rate, and approved by voters in a county-wide vote in February 2012.

On a home worth $90,000 (taxable value of $45,000), the tax rate increase of 0.356 mills amounts to $16.02.

The city plans to reduce its current fund balance – estimated at $1.2 million – by $200,000 in the upcoming year. That money will be used to provide $140,000 for paving projects and $60,000 for the capital equipment fund, said City Manager Tony Edlebeck.

Spending on local street paving is projected at $175,000, which includes $63,000 generated by the 0.5-mill road levy. An additional $50,000 will be spent on alley paving. A schedule of projects must yet be finalized.

Separately, work will take place this summer on the previously announced Westwood Avenue project (0.9 miles from Woodward Avenue south to Garfield Street). A grant from the Michigan Department of Transportation is covering 80 percent of the projected $270,000 cost.

The purchase of a garbage truck is planned this fiscal year at an estimated $190,000. That will be paid through the $60,000 spend-down of the general fund balance, a general fund contribution of $90,000, and $40,000 from the equipment fund.

A balance of $110,000 will remain in the equipment fund towards the planned purchase of a fire truck in 2018-19 at an estimated $350,000.

The city’s tax base is down nearly $150,000 as the total of all taxable valuations is projected at $126.83 million. Real property is up by more than $200,000, but both the personal property and industrial facility tax categories are down.

Total anticipated city revenue from property taxes will rise by $42,000, reaching $2.83 million, an increase of 1.5 percent.

The city’s operating levy is below what it was at the start of the century but the pension millage has gone up dramatically. In 2001, the city levied 17.306 mills for general operations and 0.862 mills for police and fire pensions.

Edlebeck said some future relief is expected as pension multipliers have been reduced for new public safety department hirers. An improving economy would also be a factor, he said.

The proposed pension levy of 3.435 mills will generate $435,723, which represents 15.4 percent of the total property taxes collected for the city’s use.

Previously, the city council approved an increase in sewer rates that will take effect July 1. The increase of 56 cents per 1,000 gallons was recommended by the joint Iron Mountain-Kingsford sewage board for improvements at the wastewater treatment plant. According to U.S. estimates, an average household of three uses about 9,000 gallons of water a month, which equates to an increase of about $5 monthly.

Despite a tipping fee increase at the Dickinson County Solid Waste Processing Facility in Quinnesec, no increase is currently planned in Kingsford’s garbage collection fees, Edlebeck said.

Jim Anderson’s email address is janderson@ironmountaindailynews.com.