DELANO, MN Delano’s general fund budget will increase by about $118,000 to about $3.32 million in 2015, while the tax rate will drop from about 56.7 percent to about 54.1 percent. Those numbers were approved by Delano City Council Tuesday, as it adopted the city’s budget, levy and comprehensive plan for the upcoming year.
Delano Finance Director Brian Bloch detailed the budget in advance of a public hearing, at which no community members commented.
“The budget increase is about 3.69 percent in 2015 and that compares to an increase of more than 6 percent from 2013 to 2014,” Bloch said.
Of the $3.32 million budget, community services account for 24 percent, followed by general government at 20 percent, public safety at 19 percent, capital outlay at 18 percent, public works at 14 percent and other expenses, such as transfers out, at 5 percent.
“Most of the things are pretty much the same from year to year,” Bloch said. “Capital outlay is the one that can change a lot. Back in 2013, capital outlay was at $458,000. That went up to $560,000 in 2014, and in 2015 it will be $590,000.”
Bloch pointed to capital needs, the city’s contribution to the street improvement program, and inflation as three factors that affect the city’s expenditures.
“This is the third year we’ve had our street improvement program,” Bloch said. “We put $80,000 into it in 2013, $160,000 into it in 2014 and another $160,000 in 2015. That’s $400,000 that we’ll have in our street improvement program. Instead of going out for bonds, or bonding for so much, we’ll be able to use some of this money.”
On the revenue side, property taxes account for 68 percent. That number had fluctuated from 65 to 73 percent over the past five years.
“The reason why it’s changed is because of intergovernmental aid,” Bloch said of the $202,000 that will make up 9 percent of the city’s revenue.
Franchise fees from Randy’s Environmental Services, Xcel Energy, Charter and Delano Municipal Utilities make up 10 percent of the city’s revenue. Transfers from DMU and Delano Wine and Spirits combine for 7 percent, followed by licenses and permits and other revenue.
“If the economy is doing well, we can rely on building permits more,” Bloch said. “They account for $70,000 of our budget for 2015. That’s a conservative estimate. The last couple years, we’ve been above that.”
Delano’s total levy is increasing 3.3 percent to $2.74 million, while the tax rate is dropping by 2.6 percent because taxable market values are rising, home values are rising and more homes are being built.
Bloch gave an example of a $225,000 home, taking into account tax rates for the Delano School District and Wright County. If the assessed market value remains the same, taxes will decrease 6 percent. If the assessed market value increases 6 percent, taxes will increase .65 percent.
“Properties with a 4.5 percent or less increase in home value will most likely see a decrease in their city tax bill,” Bloch said.
Compared to the other 16 cities in Wright County, Delano’s tax rate is ranked seventh, compared to eighth a year ago. However, looking at total tax rates, Delano is second behind Monticello.
“The main reason our tax rate is lower is because the school district levy is so much lower,” Bloch said.
The council approved the budget without further discussion.
Odd and Ends
In other business, the council:
• approved a request from Randy’s Environmental Services for a 3 percent increase in refuse collection rates. The company will now charge $4.12 for recycling, $10.15 for a 35-gallon garbage can, $13.85 for a 65-gallon garbage can and $16.02 for a 95-gallon garbage can.
• approved a payment of $29,500 to the Delano Fire Fighters Relief Association, which was underfunded by $155,485 as of Dec. 31, 2013. Bloch said it will take about five to six years to close that gap, depending on how well investments do.
• rescheduled a meeting with the Delano Water, Light and Power Commission from Dec. 9 to Jan. 13. Council members were planning to discuss employee compensation at Delano Municipal Utilities with the commission. City Administrator Phil Kern also noted the possibility of having DMU staff work as temporary snow plowers instead of hiring someone new.
• heard a presentation from Jim Wollschlager of Randy’s Environmental Services regarding the Organix Solutions Delano anaerobic digester, which will be located in the West Metro Business Park. He expects to break ground on the project summer of 2015, with completion in April 2016. Construction of the 80,000 square-foot building is expected to create 60 to 80 short-term jobs and 12 to 15 long-term jobs. When completed, it is expected to produce 110 million cubic feet of green methane gas, or the equivalent of 525,000 gallons of diesel fuel.