Council reviews new tax proposal

There’s a plan to increase Portland property taxes to pay for projects to combat downtown flooding.

Portland City Council at its meeting Tuesday heard about a plan from consultant Baker Tilly and legal firm Ice Miller that would see property taxes increase annually by about one-half of a percentage point to pay for an estimated $3 million to construct a detention pond to collect overflowing water from Millers Branch and $1.3 million to overhaul the drainage system under Meridian Street (U.S. 27).

An increase in taxes, projected to cost an extra $0.1382 annually per $100 of a property’s assessed value, would go toward a 20-year bond that would provide immediate capital to pay for the entirety of these projects, per the plan.

That plan is projected to give the city $5.3 million to pay for the aforementioned construction cost, engineering fees and other contingencies of the projects. Under the plan, $326,000 would be paid annually from the tax levy toward that bond with an additional $24,000 paid annually by the city.

Currently, Portland has a property tax rate of 3.3859%, 236th highest in the state and equivalent to a $3,385.90 annual cost for a $100,000 home, according to Indiana University.

The discussion prompted a lingering question of whether Millers Branch flooding is a county or city issue.

“Are we just going to assume and impose a tax on Portland residents … (on an issue) that could be partly or wholly a county ditch problem?” council member Kent McClung asked Portland Mayor John Boggs during the meeting.

Boggs responded by saying he envisions the detention pond as being “a joint project” between the city and Jay County but that he has yet to discuss it with the newly elected county commissioners.

The mayor, taking a more optimist approach, said the cost of the tax will decrease with additional funding from the city, and possibly the county, and grants from the state to pay for these projects.

The discussion was the first in what may be several council meetings dedicated to deliberating over the proposed tax.

“I’m sure we’re going to have a lot more discussion and a lot more questions … so everybody can feel comfortable for what we’re doing here,” Boggs said.

The proposal deviates from a previously discussed monthly charge to Portland residents to the tune of a projected $6 to $7 a month.

But to pay for these projects in their entirety, that rate could’ve been $10 to $11 a month, according to Baker Tilly. The city currently does not have a stormwater tax.

“That’s pretty steep for a first-time stormwater fee coming out of nowhere,” said Ross Hagen of Baker Tilly during the meeting.

A lack of assurance from a newly established stormwater fee would also make it unlikely the city could secure a bond off of it alone, Hagen said, but rolling the fee into property taxes would give bonders more confidence the debt will be repaid.

To create a tax levy, Portland would have to establish a stormwater board separate from the city’s board of works, but the board’s annual budget and the creation of a tax levy would have to be approved by city council.

In 2020, Portland awarded contracts to Butler, Fairman and Seufert and Wessler Engineering to engineer the creation of a detention pond and a overhaul of the Meridian Street drainage system, respectively.

In other business, council members Matt Goldsworthy, Janet Powers, Michele Brewster, Dave Golden, Mike Aker and McClung, absent Don Gillespie:

•Learned from city clerk-treasurer Lori Phillips that $117,000 of unspent money from the 2020 budget will be rolled over to the current year’s budget.

•Was updated by Boggs on his conversations with city department heads last week on potential public safety projects that they anticipate over the next few years, the most expensive of which is a new million-dollar ladder truck for the Portland Fire Department.

•Heard a comment on national issues from McClung, who was re-elected as council president. “It’s my firm belief that the elections were free and fair. In all my studies of government — and I consider myself a student of government — (President-elect Joe) Biden won, and anybody that tells you different is wrong.”