City levy rate increase lower than expected

While it might feel like taxes are always getting higher, this year’s city levy rate is lower than originally expected.

Creston City Council agreed to a proposed levy rate of $15.09. The rate will go through two public hearings before the council can officially approve the levy rate. While higher than last fiscal year’s $14.73 levy rate, the $0.36 increase is much less than Creston Accounting Manager Mandy Parsons was expecting.

“We knew that the levy rate was going to go up because of the lake dredging project. We kept saying it was probably going to be $1,” Parsons said. “The good news is that our valuation went up enough that it didn’t. It’s $0.93 for the lake dredging, but because the valuations went up, it’s only costing us a $0.36 increase. I was pleasantly surprised with that.”

The levy rate is how much money the city receives for every $1,000 of eligible property tax valuation. For example, with the proposed tax rate, a house valued at $100,000 would pay $150.90 to the city. This Union County and the Creston Community School District also have tax levies.

A number of factors go into the city’s tax levy rate. Along with the dredging of McKinley Lake, an additional $0.93 of the levy rate is coming from the debt from a series of street improvements the city made in 2018.

Aside from debt service, much of the general fund and employee costs are covered by levies. The largest portion of the $15.09 levy comes from the consolidated general fund levy, which covers day-to-day operations and daily costs.

While last year the city had a $8.40 levy for the general fund, the state is slowly lowering the maximum levy rate. This year, the max levy rate for the general fund is $8.23. By fiscal year 2029, the max will be $8.10 for all Iowa cities, no matter the size.

A $1.31 levy goes toward liability, property and self-insurance. The city levies $1.07 toward the Municipal Fire and Police Retirement System and $1.23 toward other city retirement through FICA and IPERS.

The final $1.39 of the levy rate goes toward other employee benefits such as health insurance. Parsons explained this line of the levy is lower than it normally would be due to 12 full-time city employees not partaking in the city health insurance plan.

With the proposed $15.09 levy rate, the city would bring in about $3.8 million, less than originally expected. If the council wished to increase or decrease the levy rate, every $0.04 would result in a $10,000 change. However, the council agreed the $15.09 levy was a good rate for where the city was at.

“I think the fact that it’s only going up $0.36 and we estimated $1, that sounds fantastic,” council member Kiki Scarberry said.