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City Of Spencer & Employee Union Exchange Initial Bargaining Offers

December 05, 2023 Steve Schwaller

(Spencer)– The union representing a number of city employees and the city of Spencer have exchanged initial bargaining offers and the two sides appear to be far apart on wages. The Spencer Employees Association, in its initial proposal, is requesting an increase in earnings far higher than what the city is offering. City Manager Dan Gifford told the city council Monday evening the city simply can’t afford the bargaining unit’s initial proposal…

“So the majority of our employees in the bargaining unit are funded through the city’s general fund. These departments are police, fire, parks, planning and library. The general fund tax levy is capped by state law at $8.10 per thousand dollars of valuation. Any increase in tax dollars year over year must come from increases in taxable valuation.”

Gifford says that’s being complicated by a big change by the state of Iowa in the residential rollback, or the amount of valuation the city can levy taxes on…

“In the current fiscal year homeowners were taxed on 56.49 percent of a home’s assessed value, and the fiscal year we’re budgeting for this year, where these wages would take effect, that taxable value drops to 46.34 percent, so around a 10 percent decrease in taxable value. This change cancelled out much of the growth we experienced over the last year and so considering the rollback and using the estimated taxable valuations for next year, our tax levy to support this wage increase would be a tax increase of $5.49 per thousand, and so if you had a $100,000 house that would be a $549 per year increase in taxes, and if you had a $300,000 business that would be $1,600 per year of tax increase.”

Adding to the uncertainty according to Gifford is the new tax reduction bill passed in the last session of the Iowa Legislature, even though he says the impacts that will have remain uncertain as of now. As a result, Gifford says the city’s initial proposal is for a one year contract with a two percent wage increase, which is much smaller than the union’s initial proposal, and no change to the longevity clause.

Mayor Steve Bomgaars reminded everyone the initial proposals represent the very beginning of contract negotiations.

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