Alexandria proposes 3 percent levy increase for 2013

Talk about it

When Alexandria city leaders first started going over budget requests this summer, the numbers added up to a 22 percent tax levy increase for next year.

After several budget committee meetings and work sessions, the Alexandria City Council approved a 2013 preliminary tax levy increase of 3.09 percent Monday night.

Two budget items were beyond the control of the council – a $43,769 increase in Alexandria Lakes Area Sanitary District’s (ALASD) budget to provide services in newly annexed areas of the city and a $15,056 increase in the firefighters’ retirement benefits, noted City Administrator Jim Taddei. Those budgets account for about 1.1 percent of the levy increase, he said.

In addition, the city’s overall market value is increasing about 2 percent because of areas in Alexandria Township that were annexed into the city. “So it’s really about a 1 percent increase for taxpayers,” Taddei said.

The city is prosing a 2013 budget of $10.4 million, an increase of 1.9 percent from this year’s budget. On the revenue side, the city expects to take in $4.7 million next year, a drop of 2.4 percent.

Council member Virgil Batesole was the only council member who voted against the budget and levy. He said he opposed an across-the-board 3 percent increase for employee salaries, noting that local businesses he talked to are not giving any raises.

Batesole said he wanted to keep the levy at the same level or decrease it. He listed several areas where he thought the city could save money – combining the city and county Housing and Redevelopment Authorities (HRA), combining police and sheriff “to some extent,” sub-contracting snow removal work, hiring private lawn mowing companies to mow parks, eliminating the city’s two-mile building code enforcement area so it wouldn’t have the expense of issuing permits, sharing functions with the county and not allowing the ALASD Board a blank check for its budget.

Batesole gave the council and budget committee credit for “massaging down” the budget from the 22 percent but said taxpayers should get more relief, especially with all the foreclosures and lay-offs that have been happening. “It’s sad out there and here we are raising taxes on them,” he said.

Mayor Dan Ness, who was also a member of the budget committee, noted that the council spent six or seven hours discussing the budget in detail. He said that council members were well aware of Batesole’s suggestions and did not support them, yet Batesole was bringing them up again. Ness said that Batesole seemed to be more interested in “hearing himself talk in front of the camera,” referring to the video equipment that records meetings for the public access channel.

That brought a quick response from Batesole who said the mayor isn’t allowed to vote at the meetings and that his comments were out of order. The mayor retorted that Batesole was out of order and hadn’t asked for permission to speak.

Council member Elroy Frank called for the council to vote on the budget and it passed on a 4-1 vote with Batesole voting no.

Ness noted that putting together a budget was a challenge. “It was not an easy task,” he said. “We had to make cuts that were painful.”

Only one person spoke during the public hearing on the budget. County Commissioner Paul Anderson, an Alexandria resident, said he thought the 3 percent salary increase was “a little heavy.” Taddei pointed out that salaries were frozen in 2010, bumped to 2 percent in 2011 and frozen again in 2012. The proposed 3 percent increase for 2013 would add up to a 5 percent increase over four years.

The council set a public hearing to approve the final budget and levy for December 10 at 7:15 p.m. Under state law, the city may decrease the preliminary levy after the hearing but it can’t increase it.

In a related action, the council gave preliminary approval to increase the salaries of the mayor and council members, giving them the same 3 percent increase other city employees received. The mayor would make $8,431 in 2013 and $8,815 in 2014 while council members would receive $6,308 next year and $6,498 in 2014. Unlike other city employee wages, compensation for council members has to be set for two-year intervals to coincide with the terms of office, Taddei said.

Batesole proposed an amendment that would have decreased the mayor’s salary from about $700 a month to $250 and council members’ pay from $600 a month to $300. He said those amounts should stay at that level until the budget is balanced and there is no levy increase. His amendment failed when no one seconded it.

The preliminary salary increases were approved on a 3-2 vote with Batesole and Owen Miller voting no.

Besides the budget, the council acted on a variety of other topics at Monday’s meeting. The council:

--Agreed, on a 3-2 vote, to provide up to $10,000 for a study that will examine the possibility of building an event center in the city. The study is estimated to cost $38,500. The Otto Bremer Foundation has committed $20,000, Alexandria Hotel and Hospitality is contributing $9,000 and the Alexandria Area Economic Development Commission is chipping in $5,000. Batesole and Sara Carlson voted against it, saying that taxpayers didn’t need this expense right now.

--Approved a preliminary request for tax increment financing for Deer Ridge Townhomes, a $4 million development the Alexandria HRA and DW Jones is pursuing near Knute Nelson’s Grand Arbor. It consists of 24 low-to-moderate income rental townhome-style apartments. The HRA owns the land. The TIF would last 26 years and the total assistance would amount to $220,000. The city would retain 10 percent for administrative purposes. A public hearing to discuss the TIF application is set for November 13 at 7:15 p.m. at City Hall.

--Held off on making proposed changes to the city’s tax increment financing policy. The council voted to have the economic development board rework some of the language.

--Adopted a hazard mitigation plan, which would allow the city and county to obtain grants from the Federal Emergency Management Agency in the event of a flood, tornado or other disasters.

--Agreed to rezone land along Pioneer Road to allow for a planned unit development, Stonemanor, near Knute Nelson’s Grand Arbor.

--Approved a consultant contract for a historic content study of Alexandria. There is no cost to the city. It’s being paid for through a grant.

--Approved a master partnership contract with the Minnesota Department of Transportation on cost-sharing services, such as downtown snow removal and salt/sand storage. It’s effective through June 30, 2017.

--Agreed to obtain proposals for appraisal services that will be needed for the phase 4 waterline project and work on 50th Avenue.

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