City council members and city staff heard an update on Monticello’s 2014 budget and levy at a special meeting last Monday evening. Finance Director Wayne Oberg gave council members a synopsis of what to expect for next year’s budget before the information is presented to the public at the upcoming Dec. 9 Truth in Taxation meeting.
Oberg reiterated that the preliminary levy was set for an increase of 3.16 percent, or $250,000. The final levy can be lower than this amount but cannot be higher, and the council will approve the final levy after the truth in taxation meeting is complete.
The city’s tax capacity value dropped by 2.16 percent for 2014, resulting in an increase in the tax capacity rate so the city can bring in the funds required to satisfy next year’s budget.
Oberg said Xcel Energy’s nuclear plant valuation played a significant role in the decline in tax capacity value since the plant’s property value dropped $30 million because of equipment retirements. Improvements made to the nuclear plant during their recent uprate project cannot be taxed until 2015.
Twenty-eight percent of the 2014 budget will go toward debt service and four percent for community center operations. The remaining 68 percent goes into the general fund. Oberg said all but $12,000 of the levy increase for 2014 is going toward debt service. He said the increased debt service reflects a decline in the collection of impact fees as well as delinquent special assessments. Oberg said there are two properties, both along Chelsea Road, which owe $870,000 in delinquent assessments between the two.
City Administrator Jeff O’Neill said the city of Monticello is very lucky they had a good reserve to tap into to help offset the negative effects of the economic downturn without having to make dramatic cuts to city staff, as some other cities were forced to make to support their debt service.
The 2014 budget is a mix of giving and taking, according to O’Neill. He said the council made a reduction in law enforcement hours in the city from 52 hours per day to 48 to help offset the rising costs Wright County charges for police coverage. O’Neill said they have been looking at this option for awhile because law enforcement records show a 15 percent decrease in criminal activity from four years ago. He said they would see what happens when they decrease the hours and assured council members that they can bump the hours back up in the event of rising crime rates.
On the other end of the spectrum, the city will spend additional money to purchase a new fire truck and also budgeted to increase spending on street repair projects.
“When 81 percent of your general fund revenues come from tax dollars, you can’t fund everything,” Oberg said.
Oberg said property taxes have remained relatively stable from 2008-2013, with the levy actually falling over $400,000 below where it would have been had the city kept up with the consumer pricing index’s inflation ratings in the past 10 years.
To voice your opinion or hear more about the 2014 budget and levy, the annual truth in taxation meeting will take place toward the beginning of the Dec. 9 city council meeting. The meeting begins at 7 p.m. in the community center’s Mississippi Room.
Freelancer Meghan Gutzwiller also covers education and the Monticello School District.