Council increases capital fund rate

Columbus City Council voted Tuesday to reset the city’s cumulative capital fund rate, with two members changing their vote on the matter.

The council voted 5-0 on Tuesday to pass the second reading of an ordinance re-establishing the cumulative capital fund at $0.05 per every $100 of assessed value.

Council members Frank Miller, R-District 4, and Grace Kestler, D-at-large, voted against the measure at its first reading. Both officials had cited concerns about the impact on taxpayers, who already face rising costs from assessed value and utility rates. However, after hearing more information on the matter, Miller and Kestler both voted to approve the increase.

Council members David Bush, R-District 3 and Elaine Hilber, D-District 2, attended the meeting virtually and were therefore unable to vote on this matter.

“Under the state statute and our local policy, only the members present may vote on a tax hike or rate increase,” said city attorney Alan Whitted.

The ordinance approved by the council states that the cumulative capital fund rate has “trended below the maximum allowable by state law,” with the 2022 rate currently at $0.0465 per $100 of assessed value. The rate will now be set at $0.05 per $100 of assessed value, with the change taking effect beginning with “taxes for 2022 payable 2023.”

Director of Finance, Operations and Risk Jamie Brinegar said previously that the rate has to be periodically reset to 5 cents because it decreases over time. During the council’s May 4 meeting, officials noted that it would be easier if the rate was set at this amount permanently — or, at least, reset regularly to avoid large increases.

Since then, however, Brinegar has received information from Accelerate Indiana Municipalities regarding new legislation passed by the state.

“If we establish this at 5 cents again, it will remain at 5 cents, and we will not have to re-establish every year,” he told the council Tuesday.

Miller said he was glad to hear that they could set the cumulative capital fund rate permanently instead of “playing this game” of repeatedly resetting it.

The cumulative capital fund is used for public safety capital purchases. This includes police cars, computers, car cameras, bodycams, fire equipment and fire training gear. At the council’s May 4 meeting, Brinegar said that more funds were needed to maintain vehicle rotation cycles amid the challenges of inflation.

By his estimates, the city lost about $140,000 in revenue by not having the rate set at 5 cents in 2022. This amount would have covered two fully-equipped police cruisers, or one police vehicle and one executive fire vehicle.

The city’s overall property tax rate for 2022 is $1.1134 per $100 of assessed value, with the current $0.0465 cumulative capital fund rate included in that amount, Brinegar said.

“If we were not to re-establish this to 5 cents, the additional funds we would be seeking for public safety capital we would then seek in another area, most likely in the general fund capital,” he said. “So our goal is to keep the $1.1134 in that range.”

“There’s some concern expressed by some citizens that ‘this would be an increase on my property taxes,’” said Mayor Jim Lienhoop. “And that’s just not the case.”

He added that any decision on an increase would take place when the overall rate is set during 2023 budget discussions this fall. According to Lienhoop, the city’s previous rate was about $1.15, and officials were able to decrease it to $1.11.

Miller also noted that while the city creates its budget based on an estimated tax rate, it is the state of Indiana that sets and certifies the final rate.

“It wouldn’t surprise me to see it go back to $1.15,” said Lienhoop. “It may, it may not. But it won’t be based on tonight’s decision. … It’ll be driven by wages, I think; what we’re looking at there is pretty significant. So time will tell.”