CLINTON — Members of the Clinton City Council logged several hours Thursday evening reviewing budget proposals for the General Fund, starting off discussion with what the city can afford to take on when it comes to future projects.

City Administrator Jeff Kooistra opened by explaining that actual property valuation is figured because state law allows general obligation bonding up to 5 percent of the valuation. The city could have as much as $57 million in bonds, he said, and is currently at about $20 million. Some of the additional bonding capacity will be used for Vision Iowa projects.

“In the past four years we’ve tried to be pretty judicious with bonding,” said Kooistra. He said that work will help the city’s bond rating because it has not been maxed out.

The interest rate has recently been low, At-large Councilman Ron Mallicoat pointed out. Kooistra said it is around 3.6 to 3.7 percent for general obligation bonds.

“That’s when you want to borrow money is when you can do it cheap,” he said.

Ward 1 Councilman Bob Soesbe questioned whether the industrial property value — $92 million — includes Archer Daniels Midland. Because machinery and equipment are no longer taxable, per the state government, a lot of value has been lost — to the tune of $140 million.

However, with improvements throughout the city on the horizon, particularly ADM’s co-generation facility and additional grain silos, the tax rolls will increase, said Kooistra. Some construction was completed by Jan. 1, which would show up on the 2008 fiscal year budget.

Discussions are taking place on when the tax abatements for the approximately $350 million co-generation facility will go into effect — when the entire project is completed or as soon as a portion is on the rolls.

It would be to ADM’s advantage to begin the abatement at the project’s end, said Kooistra.

Kooistra said about $330,000 of reserve will be used. That money has been stockpiled knowing the machinery and equipment tax would go away. A similar amount was expended last year, but is expected to decrease in the future.

“I think ADM’s going to bail us out ultimately,” said Kooistra. “And we’ve had a lot of other improvements.”

“It’s nice to see when you can say we’re almost through the woods here,” said Mallicoat. “We’re very fortunate and very blessed that a company like ADM...is going to stay in Clinton.”

The general fund is planned to be subsidized with $316,000 in excursion funds — the city’s percentage of admissions from the Mississippi Belle II.

Harding School is heated and insured with those dollars, and about $8,000 each goes to the Clinton Area Showboat Theatre and community service program. The Clinton Area Chamber of Commerce is allocated $5,000 from excursion funds, and $50,000 goes to the Clinton Area Development Corp. as part of a long-term contribution to the Quality Jobs 4A Strong Future initiative.

The city has submitted an inquiry to the state’s Department of Revenue to determine why the local option sales tax payment was significantly lower than anticipated.

Each month the city receives payments based on estimated figures, which are then reconciled in November. Last year the reconciliation payment was cut by about $200,000.

This is especially confusing when sales tax was expected to increase with the addition of Home Depot, city staff members said. It seems there must be an error somewhere, said Kooistra. He said city staff is working to sort through the issue.

A human resources director was added to the budget at a salary of $29,500 — significantly less than the $50,000-plus wage discussed in 2004.

People in the city clerk/finance office are involved with civil service activities, worker’s compensation claims and other issues that would be shifted to human resources.

Records are not kept up to date in every department, said Kooistra. “We need someone to stay on top of these things,” he said, or run the risk of having legal issues that could be avoided.

Soesbe questioned whether a human resources director is necessary with only 208 employees.

Newly appointed At-large Councilman Mark Vulich said he knows of much smaller businesses with human resources, and called it “a cost of doing business.”

“Department heads are responsible to maintain those records and follow the rules,” said Ward 3 Councilman Darrell Smith, who opposes creating the position.

City Attorney Matt Brisch said he would need more time to assess the situation and form a legal opinion.