Tax rate decreases about 4 percent
By Ryan Gueningsman
DELANO, MN A 2 percent levy increase was approved by the Delano City Council recently, and the city’s tax rate has decreased about 4 percent.
The budget process is an ongoing process in which citizens, city staff, and the city council express needs and priorities of the city throughout the year, explained Delano’s Finance Director Brian Bloch.
In June, city staff began analysis of department budgets. The capital improvement plan is also reviewed, and projects for 2009 were prioritized. In July, preliminary budgets were prepared and presented to the city council.
In August, city staff made council-directed revisions and cuts to the budget. In September, the city council set the preliminary budget and maximum tax levy, and continued to make revisions the next two months.
In early December, a truth in taxation hearing took place, and the final 2009 budget and tax levy was approved by the city council Dec. 16.
In the city’s 2009 budget, there are $2,564,436 in expenditures in the general fund. This is broken down to 17 percent from public works, 20 percent from public safety, 7 percent from capital outlay, 24 percent from community services, 24 percent from general government, and 8 percent from miscellaneous. In 2008, there were $2,473,875 in general fund expenditures.
Items impacting the increase in expenditures include the addition of the position of assistant to the city administrator, inflationary adjustments, contracting with River Rider for public transportation services in the city, and the start-up of a two-year street sign replacement program.
In order to have a balanced budget, the city also has $2,564,436 in expected revenues. This is split into 11 percent from franchise taxes, 4 percent from public service aids, 7 percent in intergovernmental, 8 percent from licenses and permits, 5 percent transferred from other funds, 3 percent from other sources, and 62 percent from property taxes.
Items impacting revenue include the property tax levy limit, local government aid funding, increases in municipal state aid road revenues for street maintenance, and decreases in licenses and permit revenue.
This adds up to a 3.66 increase in budgeted general fund revenues and expenditures and an increase of 2.64 percent in the general fund levy.
The approved 2009 tax rate for the City of Delano is 35.022 percent. The actual 2008 tax rate is 36.609 percent. The city established a levy amount based on its general fund, debt service, and tax abatement. The total levy for 2009 is $2,049,317, which is up 2 percent from 2008.
However, Bloch said the tax rate decreases 4.34 percent because of increases in property values and more property owners paying taxes. Of the 17 cities in Wright County, Delano has the fifth lowest city tax rate and the third lowest total tax rate, Bloch said.
Bloch also explained property taxes, and said they support three levels of government city, county, and school district. The state has a formula for how taxes are divided amongst properties.
At the time this budget was approved, city staff still did not know the effect cuts made to Local Government Aid (LGA) would have on the city. Since that time, the city has learned it will receive $86,789 less in funding it was expecting for 2008.
Any additional cuts for 2009 are unknown yet at this point, commented Delano City Administrator Phil Kern. He said he expects to know, no later than May, what may happen, and said the state has to approve its next biennium budget by Wednesday, July 1, 2009.
Increase in infrastructure fees also approved
The council authorized the annual increase to the city’s infrastructure fee schedule, including sewer and storm water trunk fees and park dedication fees.
The last time the city council reviewed the annual inflationary increases to sanitary sewer-related fees such as these was in 2005 and 2006. The storm water trunk fee was increased from $500 to $1,000 per unit in 2007. City staff has adjusted these fees annually by 3.5 percent to cover the cost of inflation.
At a recent city council work session, it was suggested the city review all of its fees and look at making revisions. The council approved a 3.5 percent increase for infrastructure fees for 2009.
Odds and ends
In other business, the council:
• approved a resolution implementing its capital improvement plan for 2009 through 2013 for the City of Delano.
• approved an increase of sanitary sewer fees.