New London approved levy increase but property taxes will drop for many
NEW LONDON -- On a 3-2 vote Wednesday, the New London City Council approved a 10.7 percent levy increase for 2010, but also approved a zero increase in the tax rate.
For those homeowners whose property values stayed the same, that will mean a zero increase in city taxes, said City Administrator Trudie Guptill.
Many residents saw their property values stay even or even drop, she said. The overall taxable market value for New London increased, however.
The certified levy for next year is $199,300, an increase of $19,300.
The general fund budget was set at $544,453, which is a decrease of $18,458 from the 2009 budget.
The council debated at length whether to keep the tax rate flat or increase it 3 to 5 percent to generate more revenue.
Because the city is anticipating making a significant increase in water and sewer rates next year, there was concern by some councilmen about raising taxes at this time, said Guptill.
Just to break even, water and sewer rates would have to increase $1.15 per thousand gallons, said Guptill.
Councilman Kevin Dittbenner said putting a tax increase and utility increase on people when salaries haven't increased would be a hardship.
On the other side, some councilmen wanted to increase the tax rate to raise general additional revenue out of concern that the city is not putting enough money into reserves.
Because there's the possibility Gov. Tim Pawlenty could hit cities with another reduction in local government aid, Councilman John Bergman said the city should increase its reserves to be prepared for a cut in state revenue.
This year the city lost $22,323 because of unallotment of state aid and will lose another $19,491 in 2010.
Unallotment is the executive branch power to reduce expenditures to prevent an anticipated budget deficit.
Mayor Bill Gossman, Dittbenner and Corky Beck voted for the motion to keep the tax rate flat and Councilmen John Mack and Bergman voted against it.
In other action, the council gave final approved to a joint powers agreement with the state Department of Natural Resources for replacing the Mill Pond Dam.
Bids for the project are expected in January or February. The project is expected to be completed by next fall.
Replacing the dam will not cost the city anything, but the amenities, like an ornamental railing and decorative stamping on the cement retaining wall that the city requested, will be at the city's expense.
Guptill said an individual has expressed interest in assisting the city with some of those costs, which could be in the $40,000 to $50,000 range.
Depending on the bids, additional grants and donors may be needed to pay for amenities, which are part of the city's beautification plan. If the bids are too high, some of the items may have to be eliminated if funding isn't available.