Levy, not fees, will pay for street work
There's good news and there's bad news for Farmington taxpayers.
The good news for those who have raised objections over the past few months is that the city of Farmington will not rely on franchise fees charged by electric and gas utility companies to pay for seal coating projects in the city.
But the seal coating projects still need to be paid for, and come next fall, that will mean higher taxes for residents.
It's not clear yet just how much taxes will increase. When council members voted 4-1 to increase the levy to pay for seal coating projects in 2012 and beyond, they opted to leave the amount of that increase open-ended.
The options put before council members Monday were to start charging residents $2.20 per month extra on gas and electric bills to help build up a fund to pay for the seal coating projects, or to increase the 2012 tax levy by $400,000 to cover the same expenses. Either way, council members have agreed seal coating is essential to the maintenance and upkeep of the city's streets.
Council and staff have discussed the possibility of implementing franchise fees to help pay for the seal coating - the city's road and bridge fund had paid for that in the past, but years of money going out and nothing coming in has depleted the fund - since last summer. By implementing a franchise fee, each household in the community would pay a flat $4.40 each month - $2.20 for gas utility fees, $2.20 for the electric utility fee.
The other option presented is to collect the necessary funding through the increase to the property tax levy. According to city engineer Kevin Schorzman, an estimated $400,000 addition, annually, would cover the cost of future seal coating projects.
Under that option, the amount residents would be charged would vary according to the property value of their homes. Residents with a home valued at $180,000 would see a monthly increase of $3.59. Those whose homes are valued at $221,000 would pay $4.51 more each month. The amount would increase based on the home's property value.
Several residents have spoken out against franchise fees over the past several months, and some council members haven't been enamored with the idea, either. On Monday, council member Julie May made a motion to go with the levy increase option, but with a catch - that council wait until they get into the budget season to determine just how much they want to increase the levy to cover the cost of seal coating.
Schorzman said city staff recommended the $400,000 amount because that would be the average amount the project costs every year. Seal coating is done in a seven-year cycle. For most of those years, the cost should fall right around $400,000; but later in the cycle, one year is estimated to cost about $309,000, while the next will run about $507,000.
"I don't know what's going to happen then," Schorzman said Tuesday. "That's a $200,000 difference. So do we just do $400,000 every year, or just do what it takes?"
Council members approved the levy increase on a 4-1 vote, with Christy Jo Fogarty abstaining. Fogarty indicated she could not support the idea without having a specific amount to vote on.