BLENCOE, Iowa (KTIV) -
It started as a bookkeeping snafu but turned into a real budget problem. Now, city officials in Blencoe, Iowa, say they've figured out how to fix the issue.
A missing report from 2010 meant the town had no authority to collect property taxes from its citizens this year.
While Blencoe Mayor Brad Tank says the mistake will not hurt the town long-term, it will mean a temporary tax increase for the next five years. At first, Tank says, the error seemed daunting, but now council members have come up with a sensible solution.
"It was a mess to start with, but after we've been through sorting out the books and everything, we've got a handle on it," said Tank.
The first-year leader says he was given two choices to make up the difference of nearly $65,000 that won't be collected from the property taxes.
One option is to balance the budget by taking money from other city funds. The other option is to take out a loan.
Tank says he'd rather not take money from one fund to pay off another. So, instead of moving the money from another part of the budget, the city will be taking a loan from the Blencoe State Bank.
"We could have probably gotten by without the loan, but it would mess up all the bookkeeping. It's better to borrow the money and keep it straight," said Tank.
Tank says the loan will be gradually paid off with a debt service levy on the property taxes. That means taxes will temporarily go up about $2 per $1,000 for the next five years, while the city repays its loan.
The mayor doesn't see the slight increase being an issue, since the property taxes in Blencoe are much lower than other nearby areas.
A decision will be discussed at other meetings before a final vote is taken on Feb. 13. The budget needs to be submitted by mid-March.
