Farmington's 'tax now, save later' plan in jeopardy

Farmington's plan to reduce borrowing and instead squirrel away savings for road repairs and equipment upgrades may have hit a pothole.

Mayor Todd Larson, part of a 3-2 majority that voted in September to raise taxes by as much as $1 million next year to create a savings plan and avoid paying interest on debt, now says he's swung back to "neutral."

"My mind has not been made up either way," Larson said. "We have three open houses scheduled. I supported putting the plan out there for people to look at and discuss."

Larson could now be the swing vote on a divided City Council, which is grappling with how to address the city's mounting debt -- currently at $38.6 million, nearly four times the city's $9.6 proposed 2012 tax levy.

"I am very concerned about the debt the city has taken on," Larson said. "Because of that debt, we're paying $1.4 million in interest each year."

Two council members have said it's better to feel the pain of a tax increase now and create a savings account that can be tapped for future repairs instead of borrowing. The two other council members have said it's unwise to further burden taxpayers in a dire economy.

Larson denies he has changed his position, but one council member who favors the saving plans has implored the mayor not to bow to pressure from those who oppose the tax increase.

"I did have a lengthy conversation with the mayor about the plan. He told me he is still on board. ... I think he might be playing the political wheel a little bit. Maybe he is trying to avoid some of the phone calls," Bartholomay said. "There are 10 to 12 residents that seem to be the more outspoken residents. If he is doing this to appease them temporarily, he is backing himself into a dark-lit corner."

Bartholomay said the savings plan advocates common-sense budgeting.

"Quit borrowing money. Reduce spending, Pay off your debts. Pay cash for things," Bartholomay said.

If the savings plan is implemented, the city would have enough money to pay cash for anticipated repairs and upgrades by 2025. Farmington would pay off its existing debt by 2045.

But the savings fund would saddle property owners with a heavier tax burden now. The average Farmington homeowner's city property tax would increase $81 to $1,128 next year, said Farmington Finance Director Teresa Walters. The long-term saving plan also calls for additional tax increases in future years.

City Council members will host three open houses on the proposed budget this fall and will vote on it in December. The council can choose to lower the proposed 2012 tax levy, but it cannot increase it.

Walters, Farmington's finance director, said she believes the mayor is trying to weigh to all sides before committing.

"I think he still supports it. At the same time, he understands there are people going through tough times right now," Walters said. "He just wants to hear what people have to say."