River Hills — River Hills is planning a 2.8 percent levy increase for 2014.
The Village Board voted, 5-1, with President Robert Brunner opposed and Trustee J. Stephen Anderson absent, for the 2014 budget proposal to be changed from showing a 0.01 percent decrease to a 2.8 percent increase. Trustees decided the tax hike was necessary to make up for a $156,744 deficit and reduce village borrowing to zero for 2014.
A 2.8 percent increase totals $80,000 for the village and is the maximum amount the village can raise taxes based on state statutes that limit tax hikes to the total of net new construction. Since River Hills did not raise taxes last year, the allowable amount rolls over to this year.
With a 2.8 percent increase, the village tax rate would increase from $6.10 per $1,000 of assessed value to $6.23 per $1,000, Village Manager Chris Lear said. The levy would total about $3 million.
The village has held the line on taxes for the last four years.
The preliminary budget presented on Oct. 16 showed the village borrowing $222,211 to fund capital projects, including road construction projects, according to village documents. Trustees were opposed to borrowing more money, since the deficit this year was due in part to borrowing that occurred for capital sewer projects.
Covering project costs
Debt service payments are increasing by about $100,000 this year, which contributed to the tight budget. That's the same amount that goes directly from the tax levy into the sewer capital improvement fund each year. Sewer charges currently cover operations and maintenance costs, not capital projects. To offset these costs, the board chose to increase sewer fees by $50 per residential unit per year.
Trustees chose to raise taxes and take the necessary amount out of the $522,000 fund balance to balance the budget and reduce borrowing to zero for 2014. The tax hike also will go toward funding a 1 percent raise for village employees that totals $22,500.
"We built an expectation that we'll never have to raise taxes, and we're kidding ourselves," said Trustee Michael White, who was opposed to borrowing more money without increasing the levy.
Lear said if they can cut down borrowing this year, in five to six years they should be able to catch up on their debt service payments.
Brunner was adamantly opposed to raising taxes, citing concerns over the number of homes currently for sale throughout the village that do not need higher tax bills.
"That doesn't even consider the families that have a really tough (time) living under (current) economic conditions," he said.
Brunner added that the board members, himself included, aren't facing economic problems, but other residents are, which is why he opposes a tax increase.
Brunner was also opposed to raising sewer charges. Every property owner is charged a sewer user fee, though a handful of people are on septic systems. Brunner said the people who do not have municipal sewers should be exempt from paying the higher fee.
Lear said there are relatively few people not hooked up to municipal sewer services, but the masses are. He said an increase in sewer fees was a way to take stress off of the levy for those type of capital projects.
These changes to the 2014 budget are not final. The public will be able to weigh in at the public budget hearing set for 7 p.m. Nov. 20.
BY THE NUMBERS
percent proposed levy increase
potential user cost increase for sewers
amount borrowed in 2014
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