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Waupaca to raise debt service levy

Property taxes to increase

By Robert Cloud

Waupaca Common Council approved a 14.77% increase in the city tax levy at its Nov. 7 meeting.

City staff presented two options regarding increases to the debt service levy.

Revenues from the debt service levy must be used to pay principal and interest on money the city borrows for capital projects.

Under the first option, the city’s debt service levy would increase from $1.16 million in 2023 to $1.66 million in 2024.

At the same time, taxpayers will see an increase in their home values due to a recent property revaluation.

“Assuming a property’s value increased by the average of the revaluation, this would result in an approximate $202 tax increase on a $250,000 home in 2024,” City Administrator Aaron Jenson noted in a memo sent to council members prior to an Oct. 17 meeting of the Committee of the Whole.

Ald. Dmitri Martin questioned how the tax increase would impact homeowners and city staff prepared a second option for increasing the debt service levy at the Nov. 7 meeting.

Under the second option, the debt service levy rises by 8.61%, from $1.16 million in 2023 to $1.41 million in 2024.

However, there will not be a one-time rate hike under the second option.

Regardless of which option is chosen for 2024, Jenson said the city’s debt service levy must reach nearly $1.74 million by 2025 to meet past debt obligations.

Another difference between the two options is how each of them affects the debt service fund balance.

Option 1 will use no fund balance, while the second option lowers the tax levy by using $250,000 from the fund balance.

Under option 1, the debt service fund balance remains at about $700,000. Under option 2, the fund balance drops to $450,000.

Options debated

“If we stick with option 1, we’re hitting taxpayers with a 15% increase one year, followed by a 3% increase spread out over two years,” Martin said at the Nov. 7 council meeting.

He noted option 2 spread two 9% tax increases out over two years, rather than hitting taxpayers all at once.

“I think it’s a little more palatable for the taxpayer and a little bit less of shock than 15% in one year,” Martin said.

When Ald, Scott Purchatzke asked why staff had initially recommended the first option, Jenson replied, that they were “ultimately being conservative with the resources we have in fund balance and knowing that we to get level soon.”

Mayor Brian Smith noted the city must borrow money in order to pay for capital improvements. He said the city borrows about $1.5 million each year for its capital improvements.

Ald. Paul Mayou said he did not like the idea that option 2 would significantly reduce the debt service fund balance.

“If the economy doesn’t improve and we go into a recession and we have just spent 35% of that fund balance, our hands are going to be tied to an extent for future projects that we borrow money for,” Mayou said. “I’m not comfortable doing that myself.”

The council voted 6-3 in favor of option 1.

Voting for option 1 were Eric Olsen, Cory Nagel, Mayou, Henry Veleker, Paul Hagen and Collin Dykstra.

Voting against option 1 were Martin, David Peterson and Purchatzke.

A public hearing on the city of Waupaca’s 2024 budget will be held Tuesday, Nov. 21.

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