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Library's Expansion | Newspaper Articles
'Free cash' to lower increase in property tax
J.J. Huggins, Sentinel & Enterprise, November 2, 2006
LEOMINSTER -- The property-tax increase resulting from the
construction of the new library will not be as high as
previously expected, thanks in part to "free cash" Mayor
Dean J. Mazzarella plans to use toward cost overruns.
The City Council, at the request of the mayor, approved a
loan order this fall to cover an additional $1.3 million for
the new library across from City Hall.
The $1.3 million could have resulted in a $14 property-tax
increase for the average single-family homeowner.
But that's not going to happen now, Mazzarella said.
"What we will do, through a variety of different sources, is
we will take the $1.3 million and pay it off between seven
and 10 years, and pay for it using some free cash,"
Mazzarella said during an interview Wednesday. "That will
wipe out the $14."
Free cash is excess taxpayer money that is not earmarked for
anything specific.
The city will put at least $130,000 in free cash toward
paying off the $1.3 million loan this year, Mazzarella said.
Other funding sources might be used in subsequent years, he
said.
Overall, the entire loan could be repaid in less than seven
years, according to Mazzarella.
But despite the mayor's plan, residents will still see a
property-tax increase because of the library, Mazzarella
acknowledged.
The city council approved $7.8 million for the library in
2003.
That spending could cause the average single-family
homeowner to see their property taxes raise by as much as
$83.
But Mazzarella called the $83 increase "the worst-case
scenario," and said he expects the dollar amount to be
lower, on average.
The mayor said officials will also reduce the hit to tax
bills by using free cash to cover the $400,000 in interest
generated by paying for the entire library project.
Mazzarella didn't have solid figures on Wednesday regarding
how much free cash the city has this year.
The city will use roughly $5 million in free cash to pay for
a variety of projects between now and June 30 -- the end of
the fiscal year -- Mazzarella said.
Mazzarella hopes to put the money toward fixing the roof at
the high school, busing students to school, a new sanding
truck, correcting a problem with the police and fire radios,
snow and ice removal, overtime costs, upgrades to the
Veterans' Center, new police cruisers and possibly another
ambulance.
"There are things -- when things got tough and the state was
cutting budgets ... we're rebuilding," Mazzarella said.
Mazzarella said he plans to give the City Council a copy of
the spending plan, and they will have to vote item by item
on whether to approve the spending.
Mazzarella touted his administration's ability to save
money.
He specifically referred to the construction of Sky View
Middle School.
"When we built Sky View, that project alone should have
resulted in a 10 percent increase in the tax rate," he said.
But the city raised taxes by just 2.5 percent to pay for the
school, he said.
"These are things we do all the time," he said. "We're
looking to save people money, not cost them more."
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