Holte told those in the audience, over the past few years, the council has raised the levy by just 2.5 percent and because of that, over time, the city has fallen behind. Though he cautioned the city may have to raise its levy again in the future, he said raising the levy by 75 percent this year will help get the city out of the hole.
Councilman Tom Goracke said the council is also trying to cut back and reign-in spending, to help correct some of the problems facing the city.
Holte also said some spending and decisions made in the past was based on some incorrect reports prepared by a former city employee. Holte said decisions were made based on these reports which showed money was in some accounts, when in fact it wasn’t.

Taxes up more than 75 percent

Following the brief introduction, the city opened up the meeting for questions.
Much of the dispute throughout the meeting was how much the taxes actually went up. Many in attendance contended their taxes not only went up 75 percent, but actually doubled or more.
Holte said the city portion of the taxes should have went up just 75 percent, however, that amount may be more when compared to last year’s amount, if the tax capacity rate of the home went up. He said the county assessor actually sets the tax capacity rate of the home, therefore, the city has no control over the assessed value of the land. He suggested those with questions should attend the Board of Equalization meeting to express concerns over the rising values of homes.
One person suggested the city base the raise in taxes on last year’s assessed values. However, Holte said the higher assessed amount is used by other entities such as the school and county, as well as the city.

How long will tax level last?

When asked how much the city is currently in debt, Holte said the city is approximately $300,000 in debt, however, Mayor-Elect Steve Dinsmore contended the city is in actuality closer to $4-5 million in debt when looking at the entire picture. He said the city had to bond its December bond payments just to get by, “that’s how far behind you are,” he said.
Later in the meeting another person asked Dinsmore how long he thought the city would be stuck in its current financial hardship. Dinsmore said he has yet to study the situation in its entirety, but thought the city could be in hard times for five years, and could actually be out of money in March since much of the city’s revenue won’t come until the second half of the year.
The council was then asked how long the current tax levels will last. Goracke said that is a good question, and thought maybe in a year or two the city will be in a better financial situation, which could lead to lower taxes.
Holte said small towns are struggling and said city’s such as Glenwood will be struggling in the future, and their taxpayers will likely be assessed more to pay for such things as water, sewers, and roads.
The city was also asked about alternative revenue as a way to help offset the increasing tax burden on residents. Holte said the city can look at such things as selling Hobo Park RV Sites currently rented out as seasonal. The money from the sold pieces of property, as well as the new tax base could bring in additional revenue for the city. He said this has been done in other places, but would need to be addressed by the next council.
Also brought up was the idea of annexing more property into the city limits, which Holte said he was in favor of in the past, but the council had not passed such a resolution. By annexing more homes into the city Holte said, “that would be one solution to dilute down the tax base.”
However, the council cautioned annexing can take quite some time, and wouldn’t fix the city’s financial situation in the immediate future. By annexing Councilman Jim Johnson said the city would also need to pay for such things as expanding water and sewer to the new residents, which will cost the city money.
Councilman Jamie Logan said the council would be open to further suggestions as to how to raise extra revenue within the city limits.

‘What if I can’t pay’

With increases as much as doubling for some, many asked what happens if a person can’t pay the new tax increase.
“A majority of people in this building can’t afford that 75 percent increase,” one person said. He also said those who are retired and on fixed incomes like himself, are not only being hurt by the increase in taxes, but by the decreasing stock market. He asked if any compromise could be met so the tax levy could be less on the residents of Starbuck.
However, Holte said the city did compromise a bit by raising the preliminary levy only 75 percent, despite being informed it should raise the levy more. Holte said raising the levy by less than 75 percent would mean the city may not be able to pay its bills so, “we really don’t have a choice.”
“What is our choice, when do we get a choice,” one woman exclaimed.
Another person said a good chunk of his pension is, and will continue to go to taxes. He said he came to Starbuck to enjoy his retirement, and “we can’t keep paying taxes like this.”
When asked what the city will do if people refuse to pay the increase in taxes, Logan said part of the problem is not everyone is currently paying their taxes, sewer and water bill, which is leading to the revenue shortfalls in the city. 
One other person suggested, “why can’t we just file bankruptcy and be done with it.” However, by doing so the city would risk putting all other city’s in the state, as well as the school, and county in a financial mess.
Goracke contended residents of Starbuck would actually be worse off by the city going into bankruptcy. He said by declaring bankruptcy, residents might find it even more difficult to try and sell a home, than in a city with high taxes for the next few years.
“There is no easy fix, we would like to give you guys the easy button, but there isn’t one,” said Holte. He continued “it’s just a bad situation, period.”

Decision delayed

Though the decision will be delayed until Monday, Holte cautioned the delay will probably not result in a different decision other than raising the levy by 75 percent. However, he said delaying the decision will give the city a chance to invite Pope County Assessor Wayne Anderson to the next meeting to address some of the concerns brought up by those in attendance.
While the city will invite Anderson to the meeting, Holte said he couldn’t make any guarantees Anderson could attend the meeting.
The meeting will begin at 5:30 p.m. at the Starbuck Community Center, and the regularly scheduled Starbuck City Council meeting will follow.
If the city were to change the levy for 2009, it would need to do so by the end of the month.