Floyd County budget appeal filed for second year in a row

By Bob Steenson, bsteenson@charlescitypress.com

For the second year in a row, a group of Floyd County residents is asking the state to review the budget passed by the county Board of Supervisors, this time alleging improper public notice procedures and “unsustainable and arbitrary” spending.

A petition signed by 274 Floyd County residents — all but a few identifying themselves as property owners — was submitted to the Floyd County Auditor’s Office on April 11 by Gordon Boge, president of the Coalition for Better County Government, the same group that spearheaded last year’s petition.

The petition protests the county budget and starts the process for the State Appeal Board to hold a public hearing, gather evidence then render a decision regarding the county budget.

The protest concerns the budget for fiscal year 2022-23, which was passed by the county board last month and which takes effect July 1, especially as it applies to expenditures “on renovations to the Floyd County courthouse and Floyd County jail facilities and the tax levy to support said 2022-2023 fiscal year budget and the expenditures of tax dollars for the year in question.”

The petition raises some points that are very similar to allegations made in a protest filed last year — a protest that the state board ruled did not meet the burden of proof to require a reduction in taxes collected or expenditures made, and that determined the way the county financed the increasing cost of the law enforcement center project was within the law.

This year’s petition lists three main points of protest:

• “The process of public notification and procedural requirements were deficient,” and then it lists five specific allegations.
• “Each and every increase in any and every line item of the budget due to the need to maintain or reduce all levels of expenditures,” along with seven allegations.
• “The proposed budget fails to clearly and adequately specify the income sources to be used by the county for the courthouse and jail renovation construction and the true cost of the same.”

Iowa Code allows residents of a city, county or school district to file a petition protesting that body’s annual budget, with a country requiring at least 100 signatures for a valid petition.

The State Appeal Board is made up of the state treasurer, state auditor and the director of the Department of Management, although, as shown last year when a similar protest was filed, most of the initial work setting up and holding a hearing and then analyzing the evidence presented is done by employees of the Department of Management.

After the local hearing is held and a recommendation is made by Department of Management staff, the State Appeal Board will discuss the petition and make its decision at a regular or special meeting of the board.

The State Appeal Board has the power “to approve, disapprove, or reduce all such proposed budgets, expenditures, and tax levies so submitted to it upon appeal, as herein provided; but in no event may it increase such budget, expenditure, tax levies or assessments or any item contained therein,” the code says.

Last year a group led by many of the same people involved in this year’s petition collected almost 1,200 signatures protesting the budget the county is currently under.

In the petition last year the group alleged improper procedures in the way the Board of Supervisors financed construction of the new law enforcement center and courthouse updates and said the county did not adequately supervise the construction costs, did not clearly and adequately specify the source of financing, and did not adequately meet the requirements of the Iowa Open Meetings Law regarding actions regarding the budget.

After holding a hearing at Wrightz Auction Co. in Floyd that was attended by about 100 people and also streamed via Zoom, the Department of Management staff later concluded that “The petitioners did not meet the burden of proof to justify a reduction in the fiscal year 22 budget. The county met the burden of proof for the increase in the fiscal year 22 budget.”

The three members of the State Appeal Board voted unanimously to not change the budget.

However, in a development that was not related directly to the protest, the Department of Management staff discovered that the county’s “maximum tax” resolution that was passed as part of the budgeting process for the 2021-22 fiscal year, mistakenly used the then-current 2020-21 numbers for the amount of property taxes to be collected, rather than the proposed numbers for the new 2021-22 budget, meaning that for a large part of the budget the county was not allowed to increase the property tax collection as it had intended.

That error – that cost the county more than $1 million in planned-for property tax revenues for the current fiscal year 2021-22 – is part of the reason that the budget increase for 2022-23 is so high, supervisors said, to make up for having to dip into its carry-over balance more than guidelines suggest in order to cover this year’s expenditures.

The specifics of this year’s protest, as listed in the petition, are:

1) The process of public notification and procedural requirements were deficient in that:

• a. The review process of the budget including review and submission of budget proposals and change order were not sufficiently identified to comply with the requirements of the Iowa open meetings law for disclosure of Board of Supervisors, activity with regard to the budget expenditures for tax year herein contested and protested; and
• b. The County Board and Auditors failure to post the certified version maximum tax levy on either the Floyd County website and Floyd County Auditor’s Facebook page; and
• c. The approved resolution/affidavit filed is invalid as the preceding requirement of posting the certified version that maximum tax levy on either website did not occur and are a violation of §331.433A, and failure to provide and maintain proof of required publication in the budgeting process; and
• d. A “carousel” of Facebook posts does not provide continual access to information as is adequate as required notice under the Iowa statute.
• e. The Compensation Board recommendations were approved after budget hearing process and budget approval.

2) Each and every increase in any and every line item of the budget due to the need to maintain or reduce all levels of expenditures given:

• a. The increase of 11.4% in one year of the General Services Tax Levy is unsustainable and arbitrary in the face of adequate reductions in budget expenses and total county record property tax levy with an increase of 10.5% in one year.
• b. Failure to maintain adequate reserves as indicated in the February 28 public hearing notice for contingency expenses.
• c. Failure to address reduction in total taxable valuation of property for FY2023 by $18.3 million.
• d. American Rescue Plan Act funds are inappropriately allocated to fund overruns on law enforcement center and other proposed general expense increases of FY2023 budget.
• e. Failure to address in Minutes of March 7, 2022, meeting that budget does not address the county’s projected ending fund balances or specify expenditures from the American Rescue Plan as discussed in said meeting.
• f. The budget proposed fails to maintain adequate cash reserve funds to cover cash flow expenditures from July 1 to September 1 of FY2023.
• g. Budget risks General Supplemental Fund balance ending with a negative balance, corrected only by a 73.3% increase in General Supplemental tax levy and fails to adequately present major reasons for increase.

3) The proposed budget fails to clearly and adequately specify the income sources to be used by the county for the courthouse and jail renovation construction and the true cost of the same.

Regarding the notice requirements, Floyd County Auditor Gloria Carr said all the required notices were published in the county’s official newspapers, the Charles City Press and the Nora Springs Rockford Register, and were published online on the county website and on the Auditor’s Office Facebook page.

Carr said she sent screenshots of the postings to Carrie Johnson, a local government representative in the Iowa Department of Management and one of the staff who was at the first protest hearing held last May, and Johnson said everything was in order.