06/18/08 — Walnut Creek tries to avoid tax increase

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Walnut Creek tries to avoid tax increase

By Anessa Myers
Published in News on June 18, 2008 1:45 PM

Members of the Walnut Creek Village Council met Tuesday night to discuss the 2008-09 budget and look for ways to not increase taxes or water rates.

"We want to keep the tax rate at 36 cents (per $100 valuation)," Mayor Darrell Horne said -- a rate that Village Administrator Lou Cook said has stayed the same for the last five years.

And the way to do that, the council decided, was to lower its contingency and hold off on the construction of a new well until next year.

Each municipality must have a certain percentage of its budget set aside for unforeseen costs. Before, that contingency was mandated at 8 percent. But now, there is more flexibility in that percentage, which can be as low as 5 percent, Cook said.

The proposed budget included a general contingency of $68,588, but council members decided to reduce that by about $50,000 to try to alleviate some of the financial pressure that was pushing the village toward at a tax increase.

The council also decided to do away with the transferring of funds to capital improvement, which is in essence a savings account, "because if anything is left over, it goes there anyway," Horne said.

Additionally, an increase in ad valorem tax revenues also will help council members keep the tax rate the same.

Due to a clerical error, the ad valorem tax line on the proposed budget incorrectly read $556,180. The actual revenue from ad valorem taxes will be $559,638, increasing the overall expected revenues to $934,468.

In an effort to cut down costs even more, council members Greg Ricker and Kathy Daniels asked Cook to take another look at several line items, including entrance improvements, shop supplies and supplies for security, to see if anything can be trimmed.

Instead of a 5-cent water rate increase, members will hold off until next year on the construction and iron removal of well No. 5 -- a well that would pump 4 1/2 times more than the current two wells combined -- and save the village $95,684.

The council decided, though, to go ahead with the permit process for the well -- a process that will likely take five months but will only have relatively minor costs associated with it -- so that next fiscal year they are prepared to begin the project.

In the meantime, if one well fails during the next year, council members said they will have to rely on the other one. If both wells fail, then the village will have to buy their water from the county, a mechanism that is already in place just in case, Cook said. That, however, would cost residents more.

"We can open the Wayne County line, but it's expensive," Cook said. "It is much cheaper for us to provide our own water."

A large part of the $934,468 spending plan -- $426,674 -- comes from administrative costs that include village manager, clerk, police and maintenance employee salaries with a 2.5 percent cost-of-living increase; general insurance and bonds; telephone; postage; office supplies; employee benefits; donations to non-profit or community organizations and programs; and travel expenses for council members.

The expenditures also include $32,000 for electricity for service at town hall, the wastewater pumping station and for all the exterior light poles throughout the village. More than $95,000 also is included for debt service on the town hall; $173,500 for services including fire, garbage, recycling, composting and mosquito control; and $55,000 for lake maintenance.

The village council will make a decision on the budget at its June 25 meeting.