Most Alexandria residents will see tax drop
Alexandria’s tax bite won’t be quite as big as expected next year.
In fact, most residents should see the city portion of their tax bill decrease by about 2 percent.
The council approved a 2014 tax levy increase of 1.26 percent after holding its truth in taxation hearing Monday night.
That’s down slightly from the 1.5 percent levy it approved in September. It’s also the city’s lowest levy increase since 2006, according to City Administrator Marty Schultz.
Ward 1 council member Virgil Batesole was the only member to vote against the budget and levy. He said the levy increase should have been at zero or lower because the city received more state aid, there are state sales tax exemptions on purchases and all city departments came in under budget. He added that even though a 1.26 percent increase may seem minor, the increases build up over time.
Council member Roger Thalman said he was disappointed with Batesole’s comments. He noted that Batesole was a member of the budget committee that came up with the initial, higher levy amount after interviewing the department heads — a “luxury” the other council members did not have, Thalman said.
Thalman added that because market values are slightly increasing in the city, the city had an opportunity to lower taxes while adding $95,133 to its capital improvement fund that will be used for street repair work that has been put off for too long. He said that rebuilding badly deteriorated roads costs much more money.
Council member Todd Jensen said he was disappointed the council couldn’t get the levy increase down to zero but said it was a good budget that he would support.
Council member Owen Miller said that the city has “paid the consequences” of zero-percent budget increases in the past at the expense of streets and infrastructure. He said he wouldn’t want to be on a council that would be forced to impose hefty levy increases in the future if those mistakes are made again.
Only one person from the public spoke at the tax hearing. Orrin Johnson of Pioneer Road said he was disappointed that the city was cutting the $10,000 it provides to the Alexandria Senior Center. He said the city should get behind the effort to make the center more active, like the ones in Fergus Falls and Willmar. He said that the city spends money to draw summer visitors into town while forgetting about its senior citizens who live here year round.
As approved Monday, the levy will rise from $5.69 million to $5.76 million, and the budget will go from $10.39 million to $10.75 million.
Even though the overall levy is increasing by 1.5 percent, it doesn’t mean that everyone’s property taxes will go up by that same amount. Actual taxes depend on several other factors such as what other tax authorities (school district, township, county) are levying and a property’s market value.
City Assessor Reed Heidelberger provided a few examples of the levy’s tax impact: The city’s portion of the tax bill on a residential homestead property valued at $100,000 would drop from $318 to $311 next year, a 2.2 percent decrease. City taxes on a $216,100 home would drop $878 to $860, a 2.1 percent dip. City taxes on commercial/industrial property valued at $462,600 would decrease from $3,763 to $3,705, a 1.5 percent drop. Taxes on residential non-homestead property valued at $156,700 would drop from $693 to $680, a 1.9 percent decrease.
Residents in one part of the city, the newly annexed areas of Alexandria Township, will likely see a slight increase in their taxes.
BUDGET HIGHLIGHTS •City employees will get a wage increase of 2 percent, which is less than the 3 percent increase they received this year. The percentage is only an interim number, however, because the city is in the middle of completing a compensation study. Two new positions are being added – a police officer and a city engineer/public works director.
•Total bonded indebtedness will increase by 2.68 percent next year, to $1.2 million.
•Money set aside for street paving and street reconstruction was reduced to nothing. The city council will explore other ways to pay for street paving.
•No increases will be given to the Airport Improvement Fund, the Planning Commission Development Fund, Street and Park Fund, and equipment funds for the fire department, police department and Runestone Community Center (RCC). The council, however, did approve spending $50,000 for building improvement and equipment repairs at the RCC.
•A new fund for information technology equipment was created. It was allocated $40,000.
•Local government aid from the state Legislature will increase $258,839. This is one of the main reasons why the city is projecting a 6.2 percent increase in overall receipts, from $1.2 million to $1.46 million.
•The city expects to transfer $200,000 from the two city-owned liquor stores’ profits next year.
•The 2014 budget includes a $95,133 levy for the Capital Improvement Fund.
•Alexandria volunteer firefighters will receive $6,633 per year of active service, up from $6,503. The city’s total contribution to the Alexandria Fire Fighter Relief Association for 2104 was set at $117,552.