2006-06-10 / Top News

Council To Consider 1 Mill Tax Increase

By Karen Gould

The financial condition of the City of Mackinac Island is improving, say auditors, and, except for the Department of Public Works, the city does not have a lot of debt.

"The city is in better overall financial condition than it was a year ago, general fund and all the other funds," said auditor Michael Konicki of Rehmann and Robson of Cheboygan during his presentation of the 2005 audit Wednesday, June 7.

Later this month, Council is expected to vote on a one-mill tax assessment increase to reduce the DPW's $3 million debt load, but politicians have also hinted they could grant a future tax break if the city has money left over after renovating the old medical center building into a dormitory. It hopes to make at least $800,000 by selling two condominiums to pay for the project.

"The loss for the Board of Public Works, which was for the water, sewer, and landfill, was reduced by $258,000," Mr. Konicki said. "So they lost money, but they lost less by $258,000."

A DPW report to Council in September, he added, will offer suggestions regarding future water rates based on the latest use data the DPW had compiled.

Other than the DPW, the city's debt at the end of March 2005 (its fiscal year) was $700,000, he said, which included the fire truck, road improvements, balance due on road repairs, and the fire hall building.

He said the city had a positive general fund balance of $9,000 at the end of its fiscal year March 31, 2005, and he estimates it had a $30,000 balance for the fiscal year ending March 31, 2006.

The positive movement in the general fund shown, he said, that Council is "monitoring the operation of the city."

In a related matter, Mr. Konicki advised the city to consider a one-mill tax increase for 2006 when it meets Wednesday, June 21.

Last year, he noted, the taxable value for Mackinac Island increased about $6 million, or 3.41 percent, from $168,520,994 in 2005 to 174,262,069 in 2006.

The city levied 7.95 mills and generated $1.3 million in property tax revenue in 2005 to support the city's general fund, and should see an additional $45,000 at the same rate this year.

The extra mill, which would levy $1 for each $1,000 in taxable value, would generate $174,262 for solid waste, which the Board of Public Works said last fall is losing money.

Alderman Jason St. Onge said that though Council did not know how the sale of the Rowe House condominiums would progress, Council may be able to lower taxes in the future based on revenue the sale generates.

"Hopefully, (with) the proceeds from that condo sale left over from the remodeling job of

the former medical center building, we might be able to pay some debt down and lower some taxes in the coming year and add some funding to these capital fund accounts," said Alderman Jason St. Onge.

"Nobody knows how that's going to come out, so it's kind of difficult to say, but we still have some things up our sleeve yet to help alleviate some of the tax burden." Accounts                                     2005 Actual                       2006 Proposed                                             Millage       Revenue             Millage       Revenue General Fund                         7.2330         $1,218,912           7.29850             $1,271,852 Road Improvements               0.1000               16,851           0.10000                   17,426 MI Trans Fund Debt               0.1190               20,054           0.11150                   19,430 Fire Hall Debt                       0.2500               42,130           0.20000                   34,852 Fire Truck Debt                     0.2480               41,793           0.24000                   41,823 Solid Waste                                   0                                     1.00000                 174,262 Total                                     7.9500         $1,339,740           8.95000             $1,559,645

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