Newton city administrator gives explanation regarding revenue and FY24 budget

In response to multiple inquiries about property taxes and the fiscal year 2024 budget, city administrator Matt Muckler provided in-depth clarifications and other facts and figures at the March 6 council meeting that show the increase in City of Newton tax dollars is less than what was initially thought.

Muckler’s speech reflected the sentiments he shared in letters to three citizens who spoke at the Feb. 20 city council meeting. Concerns were mostly aimed at a Facebook post which showed yet-to-be-updated property tax information. Some citizens in the comments claimed the city was raising taxes by 11.1 percent.

Officials were adamant that this was not true. The 11.1 percent figure that was shared is the the percent increase in max property tax dollars for the fiscal year 2024 budget. Plus, staff noted the residential rollback error from the state had not been corrected at that time, so the percentage would be even lower.

“The increase is 7.72 percent, not 11 percent. This is the correct number,” Muckler said at the most recent council meeting.

Property taxes can fluctuate depending on a community’s growth. Muckler said over the past decade or so there have been four years of negative growth and four years of growth under 2.5 percent. Years of negative growth means the city was losing revenue. With a surge of increased assessments, taxes are going up.

“The unfortunate thing that I communicated to some of our residents is that while their properties stagnated in assessments for a 15- to 20-year period, basically we’re catching up now over the last four years, unfortunately,” Muckler said, noting the city would have preferred steady growth than all at once.

Other citizen concerns in the Facebook post were aimed at the salaries of city employees, with many claiming the government was taxing its citizens specifically for massive pay increases. Muckler said this is not true. The average salary increase that a city employee will receive in fiscal year 2024 is 2.8 percent.

Muckler noted the City of Newton does not have a franchise fee. Out of a list of 10 comparable Iowa cities, Newton is one of two cities without a franchise fee. If the council were to adopt a 5 percent franchise fee, it would immediately lower the property tax levy from $17.14 to $15.34 to still receive the same revenue.

However, establishing a franchise fee comes at a price. Utility bills would be increased and put additional burden on taxpayers.

Another consideration Muckler wanted to point out was the city’s population, which has hovered around 15,000 people for several decades. The 2022 census numbers, however, show Newton is at its highest population ever at 15,760 residents. Population will continue to grow with more housing opportunities.

“I talked a lot about in my letter with the residents that expressed concern about how important it is for us to grow,” Muckler said. “If we’re not growing, it really poses challenges on trying to maintain a police force, fire department and all the services we’re providing to our residents.”

When some cities fall behind, they decide to not spend money or ignore needs. Muckler said what ends up happening is cities end up with a higher levy because they are trying to catch up with past infrastructure needs. In the past five years, Newton has completed more road projects than it had in the previous 15 years.

Muckler suggested the council’s investments in the city and its services are paying off, noting there is a 50 percent drop in property crime since 2019. The fire department is responding to more calls than it did 20 years ago, and the city is completing a much higher workload with less staff than it had 25 years ago.

“These decisions — whether to make the investment or not — do have real world consequences for our residents and our business owners,” Muckler said.

The city administrator also spoke of the differences between taxable value and assessed value. Muckler said Iowa State Code requires county assessors to assess properties at “market value.” Many properties in Jasper County were not assessed at market value for a 15- to 20-year period.

Market value is defined as: “The fair and reasonable exchange in the year in which the property is listed and valued between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and each being familiar with all the facts relating to the particular property.”

“If we have too many of those properties that are under-assessed, then we can get into equalization orders, which we don’t want,” Muckler said. “Because if the state comes in and has to do an equalization order, they’re going to push it up higher than just getting it at market value.”

When it comes to the collection of property taxes, Muckler said the city only receives 41.23 percent of residents’ property taxes. The other 58.77 percent goes to other taxing entities; Jasper County makes up 18.18 percent and the Newton Community School District takes in 37.98 percent.

“Our finance staff and myself, we’re willing to sit down with any resident or business owner that has a question about their taxes and we’ll walk through the whole process, how it’s calculated and answer any questions they have,” Muckler said, a statement that echoes previous discussions about this issue.

Another question Muckler wanted to address was: What is the city doing to make sure it is watching every taxpayer dime and being efficient with tax dollars?

Muckler quoted an excerpt from a 2019 budget memo sent to council members.

“The city has made effort after effort to downsize and become more efficient,” Muckler said. “I continue to work on this daily and will continue to weed out every last dollar of inefficiency left in the city, but I’m getting down to where there is very little left to cut.”

When Muckler was hired as the city administrator in 2017 he recommended to the city council that they eliminate two of the three highest paying salaries in the city: the economic development director position and the city engineer position. Other positions were eliminated at the water pollution control plant.

The city’s executive team, department directors and managers have taken on more staff management. Middle management for parks was eliminated, too. And the city did not rehire any position that was not essential and then only replaced positions at lower, entry-level salaries.

The employee relations committee, the ERC, approved a recommendation to the council that reduced executive pay at that time. The police department eliminated a deputy chief position and decreased its number of lieutenants from seven to three. The fire marshal position and battalion chiefs were also eliminated.

“Since then we’ve made reductions to the Newton Public Library,” Muckler said. “We focused on employee safety and dramatically reduced our workers compensation costs. We tried to push healthy living, we give a benefit to people that use the gym … and we were able to get costs down on health insurance.”

The city has partnered with the Iowa Department of Corrections to help cemetery maintenance and contracted out as much of its summer mowing.

“I didn’t want the public to think we haven’t made any efforts to try to be efficient with the way we’re running government,” Muckler said.

To learn more about city budgets and financials, visit Newton’s transparency page at www.newtongov.org/840/transparency.

“Facebook doesn’t always have the correct information on the city budget,” Muckler said. “But if you ever want to fact check it, this is a great place to fact check that information. It’s got budget highlights, renewal reports, any kind of TIF report that we’ve put, past budgets, dev reports, street finance reports.”