At their most recent meeting, the Pella City Council held a policy and planning discussion about the city’s maximum allowable tax rate, and what that means going forward for a city budget that may be more strained than usual heading into the next fiscal year.

City Administrator Mike Nardini has presented three different options as it relates to a rule in Iowa Code that a municipality must establish a maximum levy before considering an increase for the following year. At a public hearing on February 21st, the council will consider:

 Option #1 – maintain existing property tax rate at $10.20
– 88% of maximum operational levy amount
 Option #2 – increase operational levy to fund ambulance subsidy for a tax rate of $11.13
– 9% increase in the City of Pella’s levy rate
– 96% of maximum operational levy amount
 Option #3 – increase to maximum levy amount of $11.59
– 13.6% increase in the City of Pella’s levy rate
– 100% of maximum operational levy amount

Nardini says the City of Pella has maintained the same tax rate of $10.20 per $1,000 of valuation for two decades — and that could continue even if the maximum allowable number increases. He says a number of factors have created some potential concerns heading into the next fiscal year that begins July 1st, including a reduction in State of Iowa backfill amounts for previous property tax assessment reductions, higher wage increases for the city’s workforce tied to the cost of living index, and the integration of Pella Community Ambulance and a projected subsidy to operate the service of $600,000.

The Pella City Council will consider the maximum rate increase on February 21st, and will then have budget meetings late this month into the middle of March potentially, pending additional bills being considered in the Iowa Legislature.