Proposal would keep city tax rate steady

Clear Lake rate remains among lowest in the state

by Marianne Gasaway

Clear Lake city leaders plan to keep the local tax rate unchanged from its current rate of $9.70 per $1,000 of taxable valuation.

The City Council set a public hearing for March 7 to consider the budget presented at their Monday night meeting by Director of Finance Creighton Schmidt.

Schmidt reported that for seven consecutive fiscal years the City’s share of the tax rate has either declined or remained constant, without an increase.  For fiscal year 2017 the City tax rate decreased from $10.54 to $10.01 and in 2018 the rate dropped to $9.80.  For fiscal year 2019 the tax rate decreased even further, from $9.80 to $9.70.

The taxable valuation for the 2023 fiscal year continues the positive trend of growth in the community, Schmidt told the Council.  

With its $9.70 tax rate for 2023, Clear Lake will have the fifth lowest tax rate in the State of Iowa for cities with a population greater than 4,000.

The taxable valuation for fiscal year 2023 is $745,625,409, which is a $21,927,222 increase (3 percent) from fiscal year 2022.  Schmidt explained the reduction comes as the result of the residential rollback.  The rollback for fiscal year 2023 is set at 54.13 percent, which is a decrease from fiscal year 2022’s rate of 56.41 percent.

The recommended tax rate of $9.70 per $1,000 of taxable valuation would result in a tax bill for City government services of $1,060 in 2022-23 for a residential property with an assessed valuation of $200,000 (with Homestead Credit).  The property tax impact would be approximately $45 a year less for a residential property with an assessed valuation of $200,000 in Clear Lake.

The proposed fiscal year 2023 budget 

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reflects total expenditures among the various programs of $19.4 million.  Of that total, $10.5 million is directed to operations and maintenance; $8 million toward capital; and roughly $850,000 to debt service.  Schmidt said the projected ending case balance for June 30, 2023 in the General Fund is $5,996,248, which is roughly 64 percent of the General Fund operating budget.

The single larges source of revenue for the City is its property tax.  In fiscal year 2023, property taxes will represent roughly 40 percent of total revenues.

After Schmidt’s report, Council members celebrated the fact that the City’s Constitutional debt limit for fiscal year 2023 is $61,854,995 and, effective June 30, 2023, the City will have used only 5.3 percent (3,299,500) of its General Obligation borrowing capacity.  That number is one of the lowest levels of debt in the State of Iowa.  City Administrator Scott Flory pointed out that generally municipal finance advisors suggest operation in the 60-70 percent range.

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