City administration speak out on property tax matter
When city property tax notices went out in December, they came as quite the unpleasant surprise to many city of Merrill residents; to the tune of a 7.4 percent increase in 2019, when the common expectation was only a three percent increase as was announced when the 2019 City Budget was adopted on Nov. 28.
Unpleasantry soon turned to concern and outrage resulting in a total of 152 citizen complaints being filed, questions of city Finance Director Kathy Unertl intentionally withholding information from the Common Council and demands for her immediate termination. The city’s Personnel and Finance Committee held two meetings in which they discussed the complaints in closed session, as was permissible by state statute given the sensitive nature of the complaints involving members of the city’s administrative team. While little information about the complaints was made public, Personnel and Finance Committee Chair and First District Alderman Paul Russell did indicate on Jan. 8, the complaints implicated Unertl as well as City Administrator Dave Johnson and City Attorney Tom Hayden. While no action was ever made public as a result of various meetings, last week Johnson and Unertl met with the Merrill Foto News to discuss the matter from their perspective.
“I did not intentionally withhold information from the council during the budget meeting,” Unertl stated. “When calculating the 2019 city property tax, I used the same formula I had been using for the last 15 years. After reviewing everything, I realized I mistakenly provided incomplete information.”
As Unertl explains, the error came when taking into account the city’s “TID-in value” (entire tax base of the city including the city’s 10 Tax Increment Districts). Instead, she should have calculated using the city’s “TID-out” value (total tax base excluding the TIDs).
“TID-out indicates the growth that has occurred above the base value,” she adds. “We’ve had significant growth city wide, but the city is growing faster within our TIDs than outside our TIDs, which is a good thing. But I just didn’t figure it in when calculating the tax increase percentage. I’ve now been provided a formula to better estimate our TID-out value which I will use in the future. In all honesty, the information I used before was not well organized, I was putting too much information on one sheet when presenting it.”
In retrospect, both Johnson and Unertl agree, regardless of the miscalculation, the total increase of the city’s property taxes would not have changed.
“The $5.8 million property tax levy, which is what the common council approved when adopting the city budget, would not have changed. The increase percentage was an error, but that would not have changed the levy. There was a lot of confusion what the three percent increase actually meant. Some people thought that was the actual tax rate, but in reality it’s only the amount of our tax levy increase.”
In moving forward, Unertl has taken measures to prevent similar miscommunication in the future.
“Rather than keeping all the necessary information on one sheet, I have come up with a way to present the information better so council members not only have all the information they need in their packets during the budget meeting, but the information will be better organized so it’s easier understood,” she said. “I will now use two forms to present the information; one form will show the current tax levy and any amounts and percentages of any increase or decrease. The second form will display the estimated tax rate. Any implications as a result of this information will also be made available to the council when adopting the city budget.”
In addition, Unertl cites an emphasis on better communication and organization.
“In review, it’s clear we did not effectively communicate and we had incomplete information,” she added. “We have taken steps to assure that will not happen again in the future. We are planning more meetings than we have had previously to discuss information at hand and assure information is better organized.”