CLINTON — Construction continues to escalate citizens’ property values, but the city of Clinton may provide another tax relief.

In the budget being proposed for 2009-2010, the property tax rate is scheduled to reduce by 11 cents. That number continues the decline of the tax levy since it peaked in 2006-2007.

Since that budget three years ago, the tax rate would decline 38 cents if the 2009-2010 budget passes.

“The bottom line here is that we’re almost exactly 11 cents smaller in the tax level,” City Administrator Gary Boden said. “We’re bringing it down from the highs from a couple years ago.”

After increasing property taxes during most of the late 1990s and early 2000s, the tax rate jumped by approximately $1.50 in 2004-2005.

Despite the property tax decline, property values continue to rise. Residential values have gone up by almost $15 million in the last year, while industrial property increased by a little more than $30 million.

Boden said that according to City Assessor John Moreland, property values have been undervalued in the past.

“John Moreland said property values are not going down despite the economic climate,” Boden said. “They’ve actually been undervalued.

“But the fact is that our property values are the lowest in the state of Iowa when judging cities of comparable sizes. Actually, our property values might be some of the lowest in the Midwest and even in the country. It’s a bargain compared to almost anyone else.”

Overall, Boden said the past year was good for the city. Due to a strong year in the industrial sector, the city added $24 million to its tax base.

The additions made to industry helped the city plan for $6,743,793 in general tax funds. That’s approximately a $436,000 increase from last year’s numbers. Overall, the total tax collection is proposed to increase by almost $800,000.

In regard to debt services, Boden said the council will have $170,000 toward equipment. The gaming commission also gives the city $70,000 to be used for equipment, giving the city more room compared to last year’s $113,500 used for equipment.

Boden noted that if the council used $170,000 for equipment, the price tag could decrease to $100,000 with the application of the gaming commission money.

The money would go toward a 2-year borrowing plan for equipment that includes items worth $5,000 or more.

The council and Boden also discussed the allocation of sales tax money toward certain projects. Currently, one-half of the 1 cent sales tax goes toward sewer repair, while the other half is used toward property tax relief.

However, Boden suggested replacing the one-half of 1 cent used toward sewer repair and switching that to fund street repairs. Boden said that citizens want the streets repaired, and by maneuvering the tax, it would help increase street renovations.

Also, during street restoration, the sewer is usually improved, Boden said. The sales tax money used for sewer repair is not applied toward augmenting past due sewer bills, and with continued progress made on the sewage treatment plant, Boden said repairs to streets is more pressing than fixing the sewers.

“Is it not better to target one-half a cent sales tax on streets, than on something we may not need it for?” Boden asked.

In order to reallocate the sales tax money, the plan would have to go to referendum, something Boden said could happen by fall.

To clean up portions of the budget, Boden also noted items such as parking, riverport and terminal fees, facility rentals and other items have been moved from a separate budget to the general fund.

In regard to parking fees, Boden said new collection practices will be discussed at the next Internal Operations Committee. The next portion of the budget, personnel issues, will be discussed at tonight’s Clinton City Council Committee of the Whole meeting.