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Lake Herman Sanitary District proposes tax cut
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By ELISA SAND, Staff Reporter
| 08/12/2009 |
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The Lake Herman Sanitary District is accumulating a sizable reserve account and Board President Cory Heidelberger doesn't think that's necessary if the district isn't setting the funds aside for a specific project.
As a result, Heidelberger is proposing a zero tax levy for the 2010 fiscal year with the district's $1,750 annual budget funded mostly with reserves.
Heidelberger said the sanitary district currently has more than $9,000 in its account, as well as $10,000 set aside in a CD, which could be used toward the operation of the district for several years.
The district's current levy is $.17 per $1,000 in property value. That levy generates $2,331 in income for 2009.
Eliminating the tax levy entirely comes at a price. Colleen Skinner, who works with taxes and levies in the South Dakota Department of Revenue, said that taking the levy down to zero eliminates the possibility of reinstating the levy.
According to Skinner, the sanitary district (and any other entity with taxing authority) can decrease its levy by any amount, but when it comes to increasing the levy, the district is restricted to increasing it by taking into account growth within the district and the change in the Consumer Price Index.
No matter what those numbers are, Skinner said, zero times any number will always be zero.
"They need to make a decision based on what's best, but understand the ramifications as well," she said.
If dropped to zero, Skinner said, the only way to reinstate a tax would be through an opt-out, and the Lake Herman Sanitary District does currently have authority to tax an additional $3,000 through a previously approved opt-out.
After he was explained the potential ramifications of a zero levy, Heidelberger said, "It's not going to scare me away from it."
The Lake Herman Sanitary District was established 30 years ago. Heidelberger said the original purpose of the district was to establish a sanitary sewer system. Aside from a couple of studies, no project has moved forward and attempts in 2008 to expand the boundaries of the district to include areas where development is taking place did not happen.
"Ultimately, if a sanitary district is established to create a sanitary sewer system, and after 30 years they haven't, it seems to me they shouldn't be levying the money," he said.
If the district doesn't plan to move forward with a sewer system any time soon, Heidelberger also questions the purpose of the board.
The three-member board currently has one vacant seat. It meets in August to set the budget and as needed throughout the rest of the year. Activities include acknowledging the installation of new septic tanks within the district.
When asked about putting the reserve funds toward a small project aimed at improving water quality, Heidelberger said that he would be in favor if he knew that the district was able to contribute the funds.
His understanding is that funds can only be directed toward sanitary related projects.
"I'd be more than happy to use it for grassed waterways," he said. "If there's something reasonable we can do, I'm all over it."
The budget meeting for the district is 6:30 p.m. on Aug. 19 at the Madison Public Library.
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