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No support to use reserves to cut levy

By Staff | Dec 8, 2008

The Winnebago City Council approved its 2009 budget with a 12.33 percent levy hike on Thursday night.

However, an attempt by one councilmember to lower the increase to zero received a thumbs down by others on the council.

Councilman Paul Loomis suggested using reserve funds from a liquor store account as a way to eliminate the proposed levy.

“I can’t see why a city of 1,400 people has $54,000 that’s drawing three percent interest and not keeping up with inflation. I would like to see us use the $54,000 to eliminate the $47,000 increase,” Loomis told the council.

The money he was referring to is a certificate of deposit the city started with proceeds from the sale of the city-owned liquor store several years ago.

Loomis acknowledges that his ‘no hike’ remedy is a one-time fix and that levy increases probably are in store in the future years.

City Administrator Jennifer Feely was not in favor of using reserve monies because she’s not sure how much the city is going to receive in state aid. Councilman Rick Johnson agreed with Feely, saying the state’s financial woes could affect Local Government Aid.

“Twelve percent, I can live with it. It’s two nights out and having something to eat. It’s not a large amount in my opinion,” says Johnson.

Outgoing councilmember Maryann McClain, who has served on the council for 16 years, warned against a zero levy.

“It’s not a good idea. We did it one year and got the city in problems and it was hard to catch up,” McClain says.

Johnson says the 12 percent increase will mean he’ll pay only $60 more next year.

Loomis says Johnson may be able to afford the additional tax levy, but it may be difficult for residents on a fixed income.

McClain says she understands Loomis’ concern for those on a tight budget. She says residents expect taxes to go up, but the increase shouldn’t be large.

Loomis says the city has other reserves it can tap into if it needs to.

“If we deplete our reserves, we are going to be in trouble,” says Mayor Randy Nowak.

When the council last discussed the proposed budget, the levy increase was at 12.17 percent. Rising health insurance costs put the levy at 13.17 percent.

To bring it down to 12.33 percent, the street department was cut from $70,000 to $67,000.

On Tuesday, the council is expected to decide whether to proceed with two street reconstruction projects totaling $1.48 million; First Avenue Southeast and Sixth Street Southwest.