Jasper considering debt service to maintain tax rate
The City of Jasper is considering options to maintain the city’s tax levy to ensure funding remains steady to cover the costs of accomplishing citywide improvements.
As assessed values have increased due to rising property values, the average tax rates have decreased for the taxpayer. Additionally, the levy has not kept up with the increasing property values in the city. Jasper’s net assessed value is estimated to have increased $136,405,062 since last year and is now estimated to be $1,168,769,883.
Jasper’s proposed 2023 budget is $24,032,693, and the estimated tax rate is $1.16 per $100 of assessed value. These numbers are adjusted annually by the Department of Local Government Finance but this is the published estimate. Typically, the published rate is higher than the actual rate after the adjustment.
The city’s 2023 budget dropped a million dollars over the 2022 budget of $25,008,879.
Included in the ordinance setting the tax rate was a line item for 0.0855 cents per $100 for a debt service fund. However, the debt does not exist yet. The idea in this line item is to establish a placeholder for the city to potentially create a bond for costs associated with projects that are either on-going or planned.
At Wednesday’s meeting, Josh Janak, a representative from the public finance sector of the financial firm Robert W. Baird, explained the city could establish a non-controlled general obligation bond for up to $5.885 million by the end of the year to ensure it did not lose access to those funds.
Janak said that through conversations with the city they had identified work for the second phase of the downtown revitalization project that could be bonded for $2.5 million. This would establish the debt levy and maintain the city’s tax rate.
Janak said the bond would have to be established before the end of the year to actually collect those funds for the placeholder. If the bond is not established, the taxes won’t go to the city.
He explained they could then return next year to add funding for one of several large projects being considered and planned and establish a longer term bond. Those projects include the expansion and extension of 15th Street; the multiuse trail connection from St. Charles to Mill Street; or the Aquatic Center project.
The council was concerned about the potential for a drop in assessed value similar to what occurred in 2008-09 but kept the placeholder in the ordinance on first approval. It will be up for final approval at the October meeting.