PRINCETON – Princeton City Manager Jeff Clawson hosted an informational meeting on Monday to discuss various functions of Princeton’s government. He provided a breakdown of how the city’s tax dollars are spent, how the utility services are operated and how the city council functions.
Below is a highlighted overview of just some of the topics discussed at Clawson’s presentation.
Princeton is currently sitting on about $40 million in overall debt, according to Clawson. Most recently, the city has refinanced about $10 million of the debt, which will reduce interest rate over the next 17 years.
Clawson said the council hopes to refinance the debt one more time, but legally they have to wait until the next fiscal year.
In the 2013-14 fiscal year, Clawson said it’s been suggested the city take a year off from funding capital projects. In the last couple years, the city has funded ongoing projects which have attributed to the debt. The next year will be focused on getting a handle on debt and determining where the city sits with its newest projects.
The definition of tax levy and the amount paid for property taxes is one of the most misunderstood items, according to Clawson.
Clawson said tax levy is the amount of money the city requests based on residents’ property taxes. The levy is a calculation of the assessed valuation of the city as a whole. The city levies about 12 percent of what residents pay or about $1.5 million. A third of that money goes to the library, the second third goes to police and fire departments’ pension and the final third goes into the city’s general fund. The tax levy money going to the general fund is usually spent on liability insurance and workers’ compensation, Clawson said.
Water Treatment Plant
Clawson described the new water treatment plant as “an expensive proposition.”
“We’re looking at anywhere between $18 to $20 million to build it,” he said. “Most of that money we used IEPA low-interest loan money to pay for it.”
He said the new plant is designed for 4.3 million gallons a day.
“That’s beyond the need right now. There was future growth envisioned for that,” he said.
The new plant is nearing completion and expected to be online by fall. Thus far, the project is only 1 percent over budget, which Clawson said was “pretty good.”
Wastewater Treatment Plant
There have been issues at the wastewater treatment plant that are being addressed, Clawson said.
“We put a new system online, and it isn’t quite working the way we’d like it yet. So we’re working with the contractors on that,” he said. “It was about a $2.5 million investment in the cannibal system; that’s designed to reduce the volume of sludge at the plant.”
The city pays about $150,000 annually to haul sludge from the plant. The new system was supposed to save the city $100,000 annually. Until the system is functioning correctly, the city is forced to spend the money to haul sludge.
Clawson said he was recently directed by the city council to begin “aggressively” enhancing Princeton’s economic development. While he spent most of his first year working on the administrative side of the city, he said his second year will focus on developing new ways to attract businesses.
“The council thinks that’s important, and we are going to try and pursue that even more … A lot of us feel like the economy is starting to come back,” he said. “It’s not perfect by a longwise, but it is starting to show some positive signs we haven’t seen in awhile. We are encouraged by that.”
The council will be discussing selling more land in the city’s Technology Park this month. Clawson said the good news will bring new jobs and enhance existing revenue stream.
Tax Increment Financing
Princeton’s TIF region is located south of Interstate 80 on both sides of Main Street.
“It isn’t current cash flowing, which means the city is losing a little bit of money on an annual basis ... We’re trying to get one more retail-type project, and then it will cash flow through the end of it’s time,” Clawson said.
Clawson explained in a TIF area every dollar of new property taxes from a business goes to the city, rather than other taxing bodies like the school districts or park district.
“The money can only be spent within that geographic area to help enhance other projects,” he said.
Clawson explained if the city asks a business to come to the TIF area without the TIF incentive, it will force businesses to say no. If the city doesn’t offer the incentive, other cities like Peru or Geneseo will mostly likely get that business.
“A lot of people argue it’s taking money out of the school districts or these other taxing bodies … Not really true at all because it’s all new money. It isn’t taking a revenue stream that’s currently going to the school district or somebody and taking money out of that.”
The TIF funds are allocated over 23 years. Once the time period is up, the “new dollars” go into the other taxing bodies.
Clawson said he plans to host additional meetings on local government. He suggested interested citizens bring ideas they want to hear more about so he can explain, teach, or discuss further any interests or concerns.
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