COTTONWOOD If everything moves forward as projected, the Cottonwood City Council will use its foregone property tax to fund its fiscal year 2017 budget. Taxing entities are allowed a 3 percent property tax increase each year. However, Idaho tax code allows taxing districts to levy for and budget foregone property taxes, increases not taken in previous years.
Cottonwood City Council moved to approve a budget for public hearings at its meeting Monday, Aug. 8, in the Cottonwood Community Hall. The proposal for the fiscal year 2017 budget increased $587,822 from the current year to just more than $1.9 million.
City Clerk Carol Altman said there will be no fee increases in the FY17 budget proposal.
Two departments will see increases in FY17 budget expenditures: general and administration up 2.08 percent ($1,662) for a total of $81,585; and police up only $365, or 0.33 percent, to $111,462. Other increases in FY17 budget expenditures include: street fund jumps 195.97 percent, up $564,700 to $852,862; the airport fund leaps $70,750, or 1,124.62 percent, to $77,041; recreation fund up 38.16 percent, or $6,749, to $24,435; the water fund increases 2.45 percent to $315,450, up $7,530; the sewer fund up $7,973, or 4.66 percent, to $179,183; and the sanitation fund barely increases, up $15 from $145,005 to $145,020.
Animal control expenditures remain unchanged at $150, as well as the fire department at $25,900. The Community Hall budget line item will decrease in FY17 by $127,232 (down 76.84 percent) to $38,340.
Property tax revenue for FY17 is proposed to increase 6.55 percent, allowable by law under Idaho code 63-802. This is where the allowable foregone property tax comes into play.
In FY16 Cottonwood took less than 1 percent in property tax levy and the remainder was set aside for future use. Cottonwood now seeks to recover the $8,699 set aside in FY16.
Tax levy funds will be divvied up accordingly: $158,300 to the general fund, up 6.55 percent or $9,731; $93,064 to the street fund, up 6.55 percent or $5,722; $4,777 to the airport fund, up 6.56 percent or $294; and $4,908 to the recreation fund, up 6.56 percent or $302.
Other revenue increases, outside of property taxes, for FY17 include: a 278.35 percent hike in the street fund, up $558,978 to $759,798; a 3,896.9 percent increase in the airport fund, up $70,456 to $72,264; a 49.29 percent increase in the recreation fund, up $6,447 to $19,527; a 2.45 percent increase in the water fund, up $7,530 to $315,450; a 4.66 percent increase in the sewer fund, up $7,973 to $179,183; and a $15 increase in the sanitation fund, 0.01 percent increase to $145,020.
The hike in the street and airport funds was caused by major projects coming up, Altman said. Cottonwood has a nearly $500,000 grant project to work on sidewalks near the elementary school and resurface Broadway Street. The airport is eyeing a resurfacing project, which the city has received a $200,000 grant to complete. There is a 50/50 match and the city will need to fund $100,000 to meet its responsibility.
The city council will hear public comments on the budget proposal and the foregone property tax during a special hearing at 7 p.m. Aug. 29 at the Cottonwood City Hall, 501 Main Street. If approved, the FY17 budget becomes effective on Oct. 1, 2016.
Aside from reports from city departments, the city also followed up on an issue regarding airport hangar insurance and lease payments from Terry Holubetz and discussed a service agreement with Horrock Engineers, Inc. The service agreement involves lagoon seepage testing.
The city also heard the final reading and approved the conditional use permit for the Cottonwood Community Federal Credit Union. The bank will be using the property adjacent to its current facility as a parking lot.
Next Cottonwood City Council meeting is scheduled for 7 p.m. Sept. 12 at City Hall.