City cites LGA cuts for 8 percent tax bumpIt could be a lot worse. That’s one thing Alexandria taxpayers can take comfort in when weighing the city’s proposed levy increase of 8 percent for 2010.
By: Al Edenloff, Alexandria Echo Press
It could be a lot worse.
That’s one thing Alexandria taxpayers can take comfort in when weighing the city’s proposed levy increase of 8 percent for 2010.
City leaders said that Governor Tim Pawlenty’s decision to “unallot” or pull back $206,691 in local government aid this year and his proposal to unallot another $476,915 in LGA next year hit the city’s budget hard.
At the city council’s Monday night meeting, Administrator Jim Taddei said that the 2010 LGA unallotment amounts to 28 percent of the aid that the city was designated to receive.
The city, Taddei said, had the option of increasing its tax levy to offset the LGA unallotments but decided instead to reduce expenses and rely on city revenues to cover the loss.
Under state law, the city could increase the levy by as much as 17.6 percent from 2009 but the mayor and city council decided to set the maximum levy increase at 8.05 percent.
The budget the city approved Monday night calls for a $63,079 decrease in overall expenses – from this year’s $9,551,957 to next year’s $9,488,878. Non-tax revenues, meanwhile, are budgeted to be $425,260 less in 2010, mainly because of the LGA reduction.
The end result: a 2010 tax levy that’s about $363,600 more than 2009.
Just because the city is proposing an 8 percent levy increase doesn’t mean everyone’s taxes will go up that much. The actual taxes paid depend on market value, tax capacity and other tax authorities, such as the county, township and school district.
Taddei said that new development and new property coming into the city through annexation will offset some of the tax increase. He said the city’s overall tax rate will increase only about 2.3 percent, according to preliminary estimates.
In 2009, the city’s share of the property taxes for a typical residential property represented about 25 percent of the total property tax, according to Taddei.
Noteworthy changes to the budget include:
•The retirement fund for firefighters was increased $55,800 to meet the city’s obligations. The fund’s investments didn’t fare very well this year, Taddei noted.
•The debt retirement fund was increased $254,400 to cover new bond payments for the Runestone Community Center’s new floor and refrigeration system, the Phase III orderly annexation area waterline and a new city park building.
•A total of $25,000 was cut from the street paving program.
•A total of $15,000 was eliminated from employees benefit account for one year.
•The capital improvement fund was reduced from $270,541 to $38,884.
•A total of $12,000 was cut from the planning commission development fund.
•On the revenue side, $476,900 was trimmed from intergovernmental revenues (LGA); Alexandria Light and Power’s payment in lieu of taxes was reduced by $31,000; and the amount of money transferred from the two city-owned liquor stores was projected to increase by $25,000, from $375,000 to $400,000.
•Employee wages were frozen, with one exception. The city had already committed to increase park department salaries over the course of three years so they would match other comparable cities and departments. Salary adjustments for department heads were delayed until 2011.
The 2010 budget calls for a variety of capital improvement projects – computer upgrades, phone system upgrades, street overlay projects, two pickup trucks for the park department to replace existing vehicles, new digital radios for police vehicles, replacing the hockey boards at the RCC, storm water system and pond maintenance projects, the phase III/part 2 orderly annexation waterline and a one-ton truck and roller for the street department.
Those projects are contingent on federal, state and city funding.
The city’s budget committee included Mayor Dan Ness, council member Owen Miller and staff. They interviewed about 20 individuals and organizations during the budgeting process.
Although the state’s requirement for cities to hold a truth in taxation hearing was dropped this year, Mayor Ness thought it was a good idea to let residents know about the budget and have an opportunity to comment about it.
No one from the public, however, spoke during the hearing.