Newton explains why property taxes won't increase after borrowing $6.03M
Mar. 11—Before the Newton City Council commenced with four public hearings last week that would authorize the city to borrow up to $6.03 million for several different projects, officials had the city's finance officer provide responses to all of the written questions and concerns submitted by residents.
According to city documents, $4.2 million would go toward public infrastructure construction, equipment for city cemeteries, vehicles and equipment for police/fire/EMS departments, parks and airport improvements, demolitions of dilapidated properties and funding for the housing initiative program.
Up to $930,000 would be used for improvements to the tennis court, city pool, recreational trails and clubhouse at Westwood Golf Course; up to $700,000 would be used for improvements to the fire station and city hall and construction of an animal control facility and training facilities for the police/fire departments.
Finally, up to $200,000 would go towards the costs and undertaking of the Downtown Housing Grant and Downtown Micro-Grant programs.
Newton Mayor Evelyn George said since there was a written comment given to the city, she had requested Finance Officer Lisa Frasier to review those questions and concerns and address them at the March 3 council meeting. Frasier said some residents mistakenly believe the bond will raise property taxes.
"We do not intend to increase the levy at all because of this bond," Frasier said. "We work closely with our financial advisors, D.A. Davidson in Des Moines, and we project that out through many years to make sure the city can pay this without raising the debt service levy and our total levy in order to pay for these."
Newton News has summarized these questions based on the comments shared by city staff at the city council meeting.
Question #1: Wasn't the city administrator concerned about meeting city expenses after the Iowa Legislature passed property tax reform?
Frasier: That's a true statement, but this bond does not impact the general fund. That is what the city administrator was referring to when he made that comment. This bond would only be paid for with debt service funds, TIF funds or enterprise funds. So the general funds, which the city administrator was concerned about, are not used to pay for this debt that we are incurring.
Question #2: Would approving the four loan agreements on March 3 raise property taxes on the average home in Newton by a combined $92.98?
Frasier: So the levy we proposed in FY26 and beyond is only $17.10. The same as it was before. And so we don't project it to be higher in future budgets. So none of these bonds would increase anyone's property taxes. We are not raising our levy to pay for any of these bonds.
Question #3: How does the water revenue bond factor in to all of this?
Frasier: The water revenue bond passed in November 2024 (more than $2.5 million) could only be paid with water revenues generated by the water fund. It cannot be put on debt service taxes and levied on our taxpayers. That's the only way we can legally pay for that.
Question #4: Why does the city need a police and fire training facility?
Frasier: So the police and fire departments are both in need of climate controlled storage of equipment, vehicles and evidence. If you remember when we did the parking lot reconstructions, we tore this garage down over here. The police department used to use that facility, that little shed to store a lot of things like bicycles and things they picked up. They no longer have that storage. That's one item. We don't have a place for an extra ambulance when we are full. Right now we are down one, but when we have all our ambulances that we should have we don't have a place to put that. So this would also be a facility for that. The other really big thing is the fire department would do their training over at that facility instead of closing this lot. That's kind of an inconvenience for the public when they're having their water spray everywhere. When the public wants to access the fire department it's difficult for them to do that.
Question #5: Wasn't ARPA money approved for police and fire equipment and also for the golf course clubhouse?
Frasier: That is true, but we need police and fire equipment. It needs to continually be replaced and updated. We have to make sure our police and fire are equipped with the best equipment available for use when they do their jobs. The golf clubhouse what we're borrowing for in this bond is for phase three of the project. I think that is almost the final phase. So that's really good news. ARPA was for phase one.
Question #6: Can't commercial building owners fund their own projects downtown?
Frasier: A vibrant downtown attracts more visitors from other communities. So these property taxes within the district, which is a TIF area, those revenues from those properties in the district will make the payments on this portion of the bond. So the residential taxpayers will not pay on that portion of the bond. Only the property taxes from that TIF will pay on that bond.
Question #7: Won't the animal control facility cost more than Parkview?
Frasier: Parkview canceled the contract providing these services to the city. So without a contract the city has estimated the cost would be around $90,000 a year. Although the upfront costs of setting up the city's own facility will exceed that amount in year one, ongoing operation expenses are expected to be in the $30,000-$45,000 per year range. So we'll be saving almost double if we would just not have a contract and use services estimated at $90,000 year. So it's a good investment for the city and for the taxpayers.
Question #8: Hasn't the pool already been improved the past few years?
Frasier: True statement with the park bond. We did a lot of improvements at the pool. But what we're proposing is some painting of the pool for $15,000. It's very important to keep your maintenance up on the pool, and it's essential for keeping it in good working order so we don't have to shut the pool down, possibly, in the middle of summer. Then people wouldn't be able to use the pool where they purchased their passes. We want to make sure it's in excellent condition.
Question #9: How do the low or fixed income residents afford this?
Frasier: So we looked up the person who had written this letter. In 2024, their taxes were $2,566 for the year. In FY25 that fell to $2,451, which is a decrease of $115. The tax levy rate remains at $17.10 for the city. Projected in FY26 with the city's $17.10 levy and if the school and county keep their levies the same, their taxes would go down $66 more dollars to $2,385. That's a 7 percent decrease from FY24 to FY26, and the dollar amount is $181. How many expenses for anyone has gone down that much in the last two years? I don't think much has.
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