Mayor says finances might force Mt. Union to dissolve

BY BROOKS TAYLOR

Mt. Pleasant News

MT. UNION ? ?City unincorporation? was the only item of business, other than the usual approval of minutes and claims, on the Mt. Union City Council agenda Tuesday night.

The matter, however, turned out to be informational, rather than an actionable item.

?We don?t have any other information (regarding unincorporation) on the procedures at this time,? Mt. Union Mayor John Marek told the council and approximately 10 residents attending the meeting. ?Our attorney is working on researching the procedures.?

Marek?s remarks were met with silence from both the council and audience and the meeting adjourned shortly thereafter.

Following the meeting, Marek said the council has periodically broached the subject of unincorporation. ?We?ve talked about it on and off since my second year as mayor (2011),? said Market. Asked whether the talks have become serious, he said, ?somewhat serious.?

The mayor said the topic arose again this fall during the city election process. ?There are a large number (of residents) favoring unincorporation,? Marek claimed, saying he would estimate that two-thirds of the eligible voters in the town favor unincorporation. In the Nov. 3 city election, Mt. Union had 79 registered voters, according to the county commissioner of elections.

Mt. Union has several lawsuits pending against the Regional Utility Services System (RUSS). RUSS garnished the city?s general fund for non-payment of user fees for a wastewater system RUSS had built for the city in 2010.

Prior to the system being built, RUSS told the city that user fees would be $47 per month, Marek said, but after the system went online, the fees have risen to $75 monthly, largely because about 15 residents, according to RUSS officials, refuse to pay the fee due to the increase. RUSS Executive Director Bruce Hudson said the City of Mt. Union owes RUSS $41,000, which is a financial strain for a town of 110 residents with an annual budget of under $30,000.

?The Iowa League of Cities has told us that we either have to win the court case or have to unincorporate because we will run out of funds,? Marek stated.

Iowa?s Supreme Court has the RUSS vs. City of Mt. Union case on its docket for Dec. 16. The court already has heard the arguments and is expected to render a decision in early 2016, the mayor said.

A number of very small Iowa communities have unincorporated in the past five years. The last community to do so was Mt. Sterling in Van Buren County in 2012.

Iowa law states that a community may be discontinued according to the following procedures.

The city council can adopt a resolution of intent to discontinue and call a public hearing on the proposal to discontinue. Notice of the hearing must be posted at least 10 days in advance. At the public hearing, the council will receive oral and written comments regarding the proposal from community residents.

Following the hearing, the council may, at the same meeting or a subsequent meeting, pass a resolution of discontinuance. A special election request then is filed with the county auditor. A simple majority is needed in the election to either discontinue the city or reject the discontinuance.

Citizens can also request, by petition, that the council call for a special election for discontinuance of the community.

The provisions for discontinuance are found in Iowa Code Chapter 368.3 and 368.11.

If residents approve discontinuance, the matter is turned over to the State of Iowa City Development Board. The board is comprised of five members, appointed by the governor.

The development board would look at Mt. Union?s assets and liabilities. The board will be in charge of liquidating the assets through a sale or by other means. Proceeds from the sale of assets are used to pay city debts.

If the city does not have enough money to satisfy its debts, the city development board can levy against property taxes (adding the debt to residential property tax bills) to pay the outstanding debt.

Once the debt has been paid, the county absorbs the city and it becomes an unincorporated area.

In the city financial report for November, the ending fund balance of all accounts was just over $40,000. The general fund had an ending fund balance of $6,200. The largest balance of $22,910 was in the local option sales tax account.

Marek said he did not know when the council would discuss the subject again.

?We just have a lack of funds to operate,? Marek said. ?We have a lack of any growth and property values are decreasing, which makes it very difficult. We are going to have to do something soon.?

Mt. Union?s next city council meeting will be on Tuesday, Dec. 15, at 6:30 p.m., in the Community Building.