Springfield faces death or taxes

SPRINGFIELD — City commissioners Thursday began a series of workshops that ultimately will determine the fate of a struggling city.

Only two options await Springfield residents: adopt the city’s first-ever property tax or dissolve as an incorporated municipality. However, commissioners made their case during a workshop Thursday for why dissolution isn’t a choice at all.

Mayor Ralph Hammond said despite city officials’ efforts to cut every expense in the city other than essential expenditures, an ad valorem tax was needed to keep the city operational. Based on last year’s shortfall of about $600,000, that number could equal about $3.50 for every $1,000 of taxable property each year.

“We’re doing everything to save a nickel, but we don’t have no more nickels,” he said.

Springfield is currently paid up on all its bills, Hammond added. But the city is in a do-or-die position largely because of three factors: a recurring debt of $96,000 every six months to repay a state loan for a public sewage system; the siphoning of funds from roads, police and fire services that results from not increasing water rates concurrently with county rates; and a draining public cable TV system, which the city sold earlier this year.

City officials now have to have cash in hand to purchase necessities like vehicle headlights, because the city’s credit is in such shambles, Hammond said.

The only other corrective action would be to dissolve and allow the state to come in, eliminate city staff and liquidate assets to recoup outstanding debt. However, commissioners argued dissolution does not mean residents would be clear of past bills.

“They’re not just going to absorb it, pay the debt and nobody will have to pay for anything,” said Commissioner Carl Curti. “We’ll just lose our police, fire and other city services and they’ll assess a fee on the citizens. If we stay [incorporated], at least we can control our services.”

Springfield’s sole revenue comes in the form of $1.5 million from state rebates. The city has $333 million of taxable property in its boundaries, $140 million of which is tax exempt.

Commissioners also discussed slashing their own salaries. A Springfield commissioner’s salary is currently $15,583 — or about $1,300 a month. With the value of benefits added, most of the commissioners’ salaries come out to $22,298, according to city financial documents.

Commissioner Philip Dykes has proposed a salary reduction of at least $500 a month. The measure would scale back total salaries and benefits for the board from $122,536 to about $80,000 a year. But Thursday Dykes sought to cut commission salaries “down to the bone,” he said, from a 2007 resolution making commissioners salaried employees of Springfield.

“We need to remedy that and get somewhere back to reality,” Dykes said. “If we’re here for money, we need to go out and get us a good job instead.”

The city also has discussed implementing a sales tax on businesses within its boundaries to offset the impact of property taxes on residents, but state regulators require a property tax be in place before consideration of a sales tax can begin.

Commissioners would have to approve a property tax and then establish a millage rate. A mill is equal to $1 for every $1,000 of taxable value.

Over the next few months, department heads will determine what deficit the city will meet at budget time in September. Hammond expected to have a top-end millage rate and a rollback rate for the public’s consideration by the end of June. Commissioners will meet for two more workshops to discuss property taxes and commissioner salaries with the next taking place April 17 at 11 a.m. in City Hall, 3529 E. 3rd St.

“We have a long stretch to go, and it’s up to this commission and this community what we do with that stretch,” Hammond said. “I’m not walking away from this city and I won’t support anyone who would.”