Owensville aldermen will have a special meeting at 6:30 p.m. Monday, Aug. 25, to determine the city’s operating tax levy for fiscal year 2008-09.

Aldermen tabled the issue Monday following a public hearing on a proposal to increase the operating tax levy from 65.92 cents to $1.56 per $100 of assessed valuation. The city raised its tax rate seven cents last summer, to 65.92 cents per $100 of assessed valuation, to help offset costs of street bonds issued in 2003.

John Tracy, the city’s administrator, said the proposed increase of 96.45 cents is needed to generate one year’s worth of payment along with enough for a one-year reserve. The proposal is estimated to bring in $362,255 based on the city’s assessed valuation of $37,558,928. That figure is a decrease of $1,137,105 over the prior year’s assessment of $38,696,033.

Tracy said he was simply trying to show the board, and the residents, how much is actually needed to pay off these bonds without continuing to drain off sales tax revenues.

He said the city has been relying on sales tax proceeds to make annual bond payments when tax rates should have been raised several years ago. The city’s operating levy includes 29.98 cents per $100 for General Fund which will generate an estimated $112,601. The same figure will also be used for Park Fund operations with a 29.98 cent levy. The fiscal year began July 1 and ends June 30, 2009.

Tracy anticipated the proposal would not be approved Monday since Ward 1 Alderman Brian Epstein, president of the board, was scheduled to be absent. A three-fourth’s majority is required for approval. It must be approved, however, by the end of the month.

Local developer John Paul Quick was the lone member of the public to speak out against the proposal.

“I don’t think you ought to raise taxes,”  said Quick during the scheduled public hearing. “There’s no other place in the city of Owensville you can cut $60,000? You can’t cut the money by cutting staff, etc., instead of raising taxes?”

“About half the city has already been fired,” noted Joe Purschke, the city’s attorney.

“We’ve done all that I think, we’re strung pretty tight the way it is,” said Mayor Jesse Loeb. “We wouldn’t cut everybody, we wouldn’t be able to provide a service worthwhile to the people here in town.”

“Did I ask for you to cut everybody?” asked Quick, who then answered his own question adding, “No.”

“I’d like to study this more, I’m not prepared to vote on it yet,” said Ward 2 Alderman John Kamler.  Fellow Ward 2 Aldermen Rob Borgmann added, “I think it ought to be brought before the people anytime you want to raise them (property taxes).”

All three alderman said they wanted a few days to look it over before any action is taken. “We need to set a special meeting before Aug. 31 to get this put to bed and set the property tax levy for 2008,” said Purschke. “We need to mention some of the verbiage from the past street bond issue.”

Noting he was “just the hired help,” Tracy said the 96.45-cent increase is what the state said the city could raise its operating levy by  to retire its street bond debt. Aldermen will be asked to consider — for approval by Monday — a lesser increase, but an increase nonetheless, of nearly 22 cents (21.84).

Tracy said that will provide a total of 29.98 cents for debt service for the street bonds or around $112,601 a year (an increase of 22 cents this year and the 8-cent increase last year). Tracy said. However, that $214,000 is needed annually to make the principal and interest payments.

If the increase is approve, that would give the city a $176,000 reserve when combined with $58,000 the city has in reserve currently. He noted the increases will need to continue over the next three years to get the city caught up with the payment scheduled. “It’s not the popular thing to do but if they’re going to stop robbing Peter to pay Paul, they will have to raise property taxes,” said Tracy. “No board ever wants to do this but it’s needed.”

Previously the city has been making only interest payments on the bonds. The city has been using its half-cent transportation sales tax revenue to make payments.

That money, said Tracy, should be going to repair streets. He noted the ballot language allowed for increasing the tax levy to pay off the general obligation bonds.

The slight increase approved last year generated only around $30,000, he noted. (Meeting reporting for this story by Will Johnson of The Republican’s staff).