City looks to set sales tax ballot language

Apr. 15—OTTUMWA — The Ottumwa City Council is expected to take up revised ballot language regarding local option sales tax for a special election in September during Tuesday's meeting at Bridge View Center.

The current sales tax provision, which accrues through a one-cent tax on goods purchased in Ottumwa, doesn't end until Dec. 31, 2025, but the city wants to include it now to cover the general fund in future budgets.

During a work session March 26, city officials and the council discussed the sales tax, with several of the council members expressing a desire to go to an 80-20 split of the city's tax rather than the current 90-10 split that pays for street and sewer improvements, as well as property tax relief.

The city plans to hold a special election for the sales tax Sept. 3, and voters will be asked a simple yes or no question:

"Shall the following public measure be adopted? To authorize imposition of a local sales and services tax in the City of Ottumwa, Iowa, at the rate of one percent (1%) to be effective January 1, 2025 until December 31, 2035. ... Revenues from the sales and services tax shall be allocated as 20% for property tax relief, 80% for street improvements and/or sewer improvements."

There are a few positives and negatives to the lowering of the tax. It will provide more revenue to the general fund once the city, by law, begins to drawn down its combined general fund levy to $8.10 by fiscal year 2028 (it will be $8.51 in the next budget).

According to staff summary from finance director Cole O'Donnell, general fund property tax revenues, if the $8.51 were to be in place and current growth is consistent, would be just over $6 million. When the $8.10 levy becomes the city's general fund levy, the property tax revenue will be about $5.9 million.

"With all else remaining constant, revenue would not return to fiscal year 2027 levels until fiscal year 2030," the staff summary said.

Reducing the sales tax could hamper the city's timeline for the sewer-separation project. Since sales tax provided some of the funding for the project, public works director Philip Burgmeier said during the work session that "if this gets cut, either we're slowing down sewer-separation or raising sewer rates." When the sales tax measure was passed a decade ago, the 90% portion of the tax covered the cost of any sewer rate increases.

The city is also holding a public hearing before certifying its fiscal year 2025 budget. The levy rate is anticipated to drop to $20.81, a 39-cent decrease from the current fiscal year.

In other business:

— The city will look to approve a resolution to purchase new accounting software from Civic Systems LLC at a cost of $110,275.

— The city is expected to approve a $74,245 termination payment to Greg Wilson and Integrity Golf for capital improvements at Cedar Creek Golf Course.

The meeting begins at 5:30 p.m. at the Bridge View Center.

Wapello County Board of Supervisors

The supervisors will hold a public hearing to certify the county's budget for the next fiscal year.

The county will be lowering its maximum property tax level to $9.95, but also the general basic and rural services level to $3.40 and $2.95, respectively, per $100,000 of valuation. The reduction is the result of the state capturing 3% of the county's over 6% valuation growth, requiring the county to make a bigger property tax ask from the current fiscal year. Higher insurance claims also were a big factor in the county's budget.

The supervisors also will have a discussion and take possible action regarding sponsorship for RAGBRAI LI, which is coming through Ottumwa July 25.

The meeting begins at 9:30 a.m. in the third-floor courtroom/board room of the courthouse.

— Chad Drury can be reached at cdrury@ottumwacourier.com, and on Twitter @ChadDrury