Anna city officials reviewing information about home rule

The most recent regular meeting of the Anna City Council was highlighted by discussion about financial resources – and looking into a way to bolster revenue.

The meeting was Tuesday evening, Jan. 15, at Anna City Hall in Anna.

Last week's session was seen as an educational tool as council members work to learn more about the topic of home rule.

Anna voters will decide in April whether home rule should be established in the Union County community.

The Jan. 15 meeting began with a review of general government activities by certified public accountant Scott Hickam. He is with the firm of Beussink & Hickam PC in Anna.

Hickam covered topics which included the city's general fund, public safety, transportation, social services (sanitation and the city cemetery) and recreation (the city park and pool).

Statistics shared by Hickam showed that for Anna's fiscal year which ended on April 30, 2012, sales taxes generated 45.2 percent of the city's revenue.

Other revenue sources included income tax, 15.2 percent; property tax, 16 percent; and service fees (such as those levied to pick up trash), 15.9 percent.

A look at expenses for the fiscal year which ended on April 30, 2012, showed that 40.4 percent of funding went to public safety, 20.8 percent to transportation (streets), 16.2 percent to the general fund, 15 percent for social services and 7.5 percent for recreation.

Hickam included a review of trends in revenues and expenses dating to 2008.

On the revenue side, sales tax and property tax have been trending upward. The positive growth in sales tax revenue was an issue which would be revisited during the discussion.

Hickam noted, however, that the upward trend in property tax revenue was tied to an increase in equalized assessed valuation; the city's tax rate has not increased.

Expenses have been trending up in such categories as public safety and transportation, while showing a downturn in the general fund and recreation.

The presentation highlighted key points which have unfolded during the last five years:

Cost savings have been realized with a reduction in the city's full-time staff numbers.

Significant fixed asset purchases and infrastructure improvements have been realized. (Those positive developments have been highlighted by the use of major grant funding without incurring debt.)

The city's portion of the property tax rate has dipped slightly, from 85 cents to 84 cents.

State-allocated revenues peaked in 2008 and have shown a steady decline since that time.

Although property tax receipts increased, due to a local tax cap, they were not sufficient to maintain pension funding levels without reducing other tax levies, Hickam noted.

He also outlined several key issues for the council to consider as the city looks to the future.

•How to maintain existing levels of service with a minimal increase in costs.

•How to maintain and improve local infrastructure and fixed assets.

•How to maintain cash reserves in order to preserve potential matches for grant funding.

•How to provide for pension funding requirements.

As plans are made for the future, Hickam suggested that the city will not be able to rely on increases in the allocation of state resources. The local property tax is capped. Local fees, he suggested, can only increase nominally.

He suggested that the "most viable solution" to the city's revenue challenges would be to consider an increase in the local sales tax rate, which now stands at 1 percent. Figures presented at last week's council meeting indicated that the sales tax currently generates $1.3 million a year for the city.

Anna would have more flexibility in its sales tax levy with the implementation of home rule, city officials contend. And such a tax is borne by all of those who shop in the community.

As the situation stands now, Anna's taxpayers "are footing the bill for everything," Mayor Jim Cross said. "We have to think about what's best for the people inside the city limits," he added.

As discussion wrapped up, the mayor returned to the idea that the council and the community will need to continue to learn more about home rule as the April election draws closer.