City council approves preliminary 2005 tax levy

The preliminary property tax levy is five percent higher than last year while the overall budget increased nearly ten percent.

In addition to approving the preliminary levy and budget last week, the council also set a truth-in-taxation public hearing for Wednesday, Dec.1, at 6:30 p.m. for residents to ask questions about the city budget and its tax consequences. A continuation of the hearing is scheduled for Wednesday, Dec. 8, if necessary.

The preliminary city budget represents a 9.6 percent percent spending increase ($70,548) from the 2004 budget. The proposed tax levy is up 5.1 percent ($22,164) from 2004.

By law, the city's proposed levy had to be certified by the county by Wednesday, Sept. 15.

Once the preliminary tax levy is approved, it can only be increased by referendum, said city administrator Steve Helget, so the levy amount is a worst-case scenario. It's possible that the levy amount may decrease as the budget continues to be adjusted, said Helget.

Helget cautioned that the proposed budget is still in its earliest stages. Details have only been worked out for the general fund at this point, he said. The city has until the end of the year to finalize the budget and submit it to the state.

The city will also approve its final tax levy in December.

The city's expected revenue for 2005 will come from state aid ($518,892); property taxes ($456,455); motor vehicle fees ($107,500); fire contracts ($45,000); airport ($43,000); police contract ($35,000); building permits ($31,600); interest income ($30,000); liquor store income ($27,500); franchise fees ($26,800); fines ($20,000); and licenses and permits ($7,405). Miscellaneous revenues make up the remaining $82,000 of the general fund.

After two years of reductions in state aid, the city is expecting a $40,000 increase in state aid for 2005. In 2003, cuts to state aid forced the city to amend its budget. State aid cuts in 2004 were handled by eliminating or reducing some transfers from the general fund to various capital improvement funds.

Helget hopes that the increase in aid from the state is the beginning of an upward trend. In 2005, Helget hopes to start making up for lost transfers to capital improvement funds.

Wages account for a large portion of the 2005 budget increase, with a total increase of $30,335 throughout the city's departments.

The largest general fund increase was made to the public safety/police protection fund, which has a preliminary budget of $324,801, up $30,404 from the 2004 budget. Salaries and insurance increases account for most of this ($15,361), along with a $5,000 increase for legal fees and a $3,500 increase for capital improvements.

Other spending increases are budgeted for the general planning fund ($9,679), the administration fund ($7,981), the municipal building fund ($5,652), the motor vehicle fund ($4,456), and the public safety/fire protection fund ($3,511).

Projected general fund expenditures include $324,801 for public safety/police; $141,738 for public safety/fire; $138,974 for streets and alleys; $130,099 for administration; $113,326 for motor vehicle; $111,500 for bond payments; $80,322 for municipal parks; $51,773 for public services/airport; $41,939 for snow and ice removal; $36,000 for the municipal building; $35,000 for recreational programs; $32,876 for beaches/Veterans' Memorial Park; $32,500 for street lighting; $28,595 for the mayor and council; $26,900 for building inspections; $11,910 for cable television; $9,000 for human rights; $8,550 for the library; $5,000 for the Koronis Civic Arena; and $4,525 for emergency services. Miscellaneous expenditures account for the remaining $65,915 in spending.