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Orchard City looking for new revenue sources

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Orchard City trustees are considering a town sales tax and other possible money raising ideas. Discussion of various ideas will begin at the town board's first work session of the year: Wednesday, Jan. 4, at 7 p.m. according to town hall.

The meeting is open to the public.

During recent budget hearings, the town board discovered a large carryover cash balance in the town's road fund and was able to include some maintenance projects to be completed in 2016 and added in 2017. The 2017 road fund budget shows a beginning fund balance of $508,374, and total funds available for roads of $685,058.

Total expenditures from the fund during 2017 are projected at $268,714, with an end-of-year 2017 fund balance projected at $407,809.

The town budget has, for the past several years, noted the decline in state gasoline tax revenues used to care for town roads, and the need for additional, unspecified sources of revenue. It does so again this year saying that the road fund is failing.

"The road fund is no longer able to sustain itself with the declining revenue in [state gasoline tax] and interest earnings. It is the hope of this board that the community will become aware of the failing road fund and that future projects will have to be supplemented by other sources," states the town budget document.

For 2017, state gasoline tax revenues to Orchard City for roads is expected to be $151,995, or 86 percent of the year's expected spending on roads. In 2016, the state gasoline tax provided $137,980 in road funds to Orchard City.

In town board discussions during 2016 about a possible sales tax proposal to fund roads, several main points were made:

• A sales tax would require the town to implement a business license to ensure the taxes were being paid;

• A 2 percent sales tax would raise only enough money to supplement the road fund. It would not be sufficient to pay the cost of town roads and would likely have to be increased at some future time.

• Funds from a sales tax proposal might be used for other town needs besides roads.

No decisions have been made by the town board on the issue.

The town's 2017 budget document adopted by trustees states the following about the road fund:

"The [total road fund new] revenue [for 2017] is in the amount of 176,682. This level of revenue makes it difficult to keep up with the annual maintenance required to prolong the service life of the town's roads. Also, these revenues can change dramatically from one year to the next, or they could also be changed by the general assembly.

"Revenues dedicated to the road fund are not sufficient to fund a major street and road projects. In the past major street and road projects have been subsidized by grants and/or transfers from the general fund. Because the general fund is pulled in different directions, it is not a steady and reliable source of funding for major road repair and construction.

"Orchard City road projects and spending scheduled for 2017 include the following ones: $15,000 for the crack sealing of Iris Road and Fairview Road; $50,000 chip seal for one mile of road; $7,000 in rough overlays and $15,000 for road shouldering. The purchase of a used snow plow/dump truck is estimated to cost $60,000 which will be split evenly between the road fund and the water fund. Purchase of a new employee truck for $25,000 that will also be split evenly between the road fund and the water fund. The road fund will continue the replacement of any culvert if there is a failure."

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