CROTHERSVILLE — The Crothersville Town Council is once again considering re-establishing a cumulative capital development fund.
Following some discussion during a recent meeting, the council set a second public hearing for 6 p.m. Thursday at the town hall, 111 E. Howard St,. Crothersville.
The fund could help the town with purchases related to infrastructure, vehicles and equipment.
If it is approved, the property tax rate would increase up to 5 cents for every $100 of assessed valuation. The current rate is 0.0132.
A $100,000 homestead property would see an increase of roughly $12 a year, and that would change the town’s revenue from an estimated $525,000 to $551,000, council President Jason Hillenburg said.
“(Revenue generated from the fund) can be used for any lawful purpose, and it does not affect your maximum levy,” Reuben Cummings with GFC Consultants LLC told the council.
“If you increase that levy, you don’t have to pull down your general fund level or your park or whatever else it might be to offset,” he said. “You guys are always working on a park project or a sidewalk project, and just a little bit extra revenue helps feed those little projects that need to be done. Otherwise, you’re eating up your cash balance outside your regular budget.”
The town hasn’t increased the rate since 2006, council Vice President Jamy Greathouse said.
“Once you establish it, that rate will generate a levy for next year based on next year’s AV,” Cummings said, noting the current assessed valuation is based on $66.2 million. “The reason the rate drops is that levy is allowed to increase a little bit, fluctuate, because when the AV goes up, that’s when that rate starts dropping, so to me, it’s not really a rate-driven fund. It really starts with a rate and then becomes a levy-driven fund.”
Councilwoman Terry Richey said she’s still waiting to receive some financial information to decide if the time is right to re-establish the cumulative capital development fund.
“Until I have some numbers and some answers in front of me, I just don’t feel like I can support it right now,” she said. “It’s going to make a $25,000 difference, and I know that may be a $12 increase right now. I just don’t feel like I have the answers that I need to approve raising everyone’s taxes at this time. I just have a lot of questions.”
When Cummings spoke to the council in February 2021 about re-establishing the fund, Crothersville residents already were being impacted by a 59% sewer rate increase. The council and some town residents agreed it wasn’t the right time to get the fund going again.
He recently returned to see if now is the right time.
“The cash balance of the general fund has been absolutely hammered over the past three or four years. This would aid that because it would take some pressure off the general fund, go up in cash balance,” Cummings said. “This cash balance is pretty weak, in my opinion, but we’ve been working on it for a while. It’s just taking awhile to get there.”
Greathouse said he agrees with Richey to an extent.
“But I also believe that it has been a miss on our part to allow it to go on for 16 years without re-establishing,” he said. “If we’re talking about this increase now of $25,000, that means that’s that potential over the last 16 years that we’ve been losing somewhere in that area for a $10, $12 increase overall.”
Greathouse also said Crothersville’s total tax rate is considerably lower than some other local communities.
“I agree with Terry that there are still some pieces of the puzzle that I would like more clarity on,” he said. “However, I don’t want us to put it off for a whole ‘nother year. I don’t want us to continue going on and missing out on those opportunities.”
Councilman Chad Wilson then proposed setting a special meeting to further discuss the issue. The council will have an executive session at 5 p.m. Thursday, followed by a public hearing at 6 p.m.
If the council wants to re-establish the fund, that has to be adopted and most of the paperwork has to be submitted by April 30.