Financial Director Julie Frederickson Explains Where Collected Tax Money Goes

IRONWOOD, MI - Wednesday, December 29, 2010 - Ironwood Financial Director Julie Frederickson addressed the City Commission Monday night to update the Commission on the City's Financial Department.

"Basically, you know what I do... I'm the bean-counter here at the City." Frederickson began, "And a lot of the work we do here with the City is very cyclical. For example, right now we're in calendar year-end so we are doing a lot of payroll -- W-2 information; State and Federal Tax information... that sort of thing."

She went on to say that her department recently finished up with City audit and very shortly they will begin on the new budget.

In addition to being the City's accountant, Frederickson also acts as the City Treasurer. As Treasurer, it is her responsibility to collect taxes for the City.

"I get a lot of questions. I get a lot of complaints. And again, I'll just do a little bit of one-on-one here so that if you get, in turn, a few phone calls you can help too." Fredickson told the Commission. Frederickson explained that the City collects taxes for every region listed on the pie chart below. In addition to collecting taxes for the City, taxes are collected for the Schools; the County; the College; State Education; and "every entity tax levies taxes here."

The total taxroll for the City is well over $5.2 million dollars. $4.8 million is collected in the form of summer taxes and the remainder is collected as winter taxes. 

Frederickson pointed out that only 26% of all collected taxes are City taxes. She said a lot of people come in complaining that they are paying "thousands" of dollars in taxes and they fully understand where their tax dollars go. To create an example, Frederickson created the pie charts above and below using her own tax bill. She told the Commission that the taxable value of her house was $20,000 and her tax liability is just under $1,500. As demonstrated below, the City portion of Frederickson's taxes amounts to only $383.

Frederickson pointed out that the Schools and the Bond Debt for the Schools amounts to about 40% of the total tax liability. Including State education costs, nearly 50% of all taxes paid in the City of Ironwood go towards education.

Frederickson made it very clear that all tax levies have to be voted in by the people. When people complain about their high taxes with all of the tax levies, it is up to the voters to decide what is added to their taxes.

Of the 26% City Operating funds, the largest expense for the City is Public Safety. In the example above, out of the $383 in taxes levied, $150 goes to Public Safety.

Frederickson told the Commission that some of the numbers are different than typical. For example, Community Development is higher due to the Downtown Rennovations Grant and our Street Fund is lower due to the fact that no major streets were done. 

According to Frederickson overe 84% of total taxes have been collected for the year.

Commissioner Lamb asked Frederickson when the Memorial Building Debt would be retired. Frederickson said she believed it would be 2015.

Mayor Burchell complimented Frederickson on the summary and asked if the pie charts could be added to the City website.

The Commission thanked Frederickson for her presentation and the continued with the remainder of their meeting.