City Administrator Joe Hoffman presented details of the preliminary 2018 budget/levy during the Truth in Taxation portion of the December 4 city council meeting.
The city’s preliminary budget of $897,186 for 2018 was approved in September. There is a 7.9% ($65,692) increase over 2017. About 2.3% of the increase is due to increases in operating expenses like insurance and wages. The city council is also looking to build on a fund for future capital projects. Included in the 7.9% increase is $46,000 for future capital projects.
Hoffman demonstrated that growth of state aid has not kept up with growth in expenses. In 2004 state aid made up 42% of the city’s total revenue. For 2018 state aid will only be 26% of the city’s revenue. The city now needs to rely on the levy for a higher percentage of needed revenue. In 2018 the levy will provide 48% of the revenue for the city.
Bond payments have ticked up over time. The Twenty-14 Improvement project has added to annual bond payments. Seventeen percent of the total budget ($334,253) will go to the 2018 bond payments.
The formula for city and county property taxes is determined as follows: total proposed local budget minus all non-property tax revenue (state aid, fees, etc.) equals property tax revenue/levy needed; assessor’s market value times state mandated class rates equals total tax capacity. The property tax revenue/levy needed divided by the total tax capacity equals the property tax rate (tax capacity rate).
Dorrie and Don Besse commented on the increases in their commercial property taxes for their detailing and storage businesses. Their comments did not specifically pertain to the budget/levy presentation for the city of Preston. There were no other comments from the public.
The final budget and levy will be certified at the December 18 city council meeting.
Other business in brief
• Mayor Kurt Reicks reported that the National Trout Center has about $26,000 on hand, which is about $6,000 more than the NTC had on hand at the end of 2016.
• The council approved a contribution of $750 to the Southern Minnesota Initiative Foundation, the same contribution amount made last year.
• The city renewed its hauling contract with S & S Sanitation with a few changes. The new contract runs from January 1, 2018 through December 31, 2022. Tony Severson proposed the 5-year contract with a base rate of $19.80 per month for 2018 and a 1% increase each year thereafter. Upon request, senior citizens (65 and older) will get a $2 discount.
• The 2018 CEDA contract was approved with an increase $857 (3%) or a total of $29,411 for 2018. Cathy Enerson serves the city as EDA director 5 days per month. The contract cost is split two-thirds EDA and one-third Preston Public Utility (PPU).
• Fillmore County Engineer Ron Gregg requested that there be no parking along part of Fillmore St. E (CSAH 12) between the hours of 2-6 a.m. to aid in snow removal. This involves CSAH 12 between the intersection of St. Anthony St. N and Fillmore St. E to the intersection of Fillmore St. E and Center St. NE. The county posted signs on this segment (100 block of Fillmore St. E) this fall to prohibit parking from 2-6 a.m.
The county has requested that the city pass an ordinance to enforce the no parking. Reicks noted this is a residential area. The availability of off street parking for residents was discussed. As the signs are already up, it was noted that residents have not complained about the restriction. As affected residents should have access to off street parking, Hoffman was directed to draft an ordinance.
• Approval was given for a proposal submitted by Frank Electric to upgrade the lighting in city hall. The proposal is to remove ballasts and use direct wire (120v) LED tubes for energy savings. The total cost is $3,860 with an estimated rebate from Southern Minnesota Municipal Power Agency (SMMPA) of $1,575. The net cost is to be $2,285, which is expected to be paid back through energy savings in just under four years. The cost will be split with PPU.
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