St. Francis City Council proposes 7 percent levy increase for 2013

St. Francis residents could be paying more in city taxes in 2013.

Although the city council was reluctant to do so, it approved a proposed payable 2013 levy Sept. 4 with a 7 percent increase on a 4-1 vote.

The city will need at least a 5 percent levy increase to make the 2013 budget work, said City Administrator Matt Hylen.

Even then, there will be little wiggle room and the city may have to use reserve funds, he said.

Councilmember Jeff Sandoval wanted the council to consider an 8 percent levy increase.

“I am just afraid the city will look to the reserve fund but we cannot tap into it again,” he said.

The reserve fund is money the city will need for a rainy day and it will scarcely get the city though the next budget year, Sandoval said.

Mayor Jerry Tveit voted against the 7 percent levy hike because he wanted no tax levy increase.

“I know the staff has worked hard to get the budget down and (the city) even downsized the staff,” but he wants to see a zero increase if possible, he said.

“I would like to do the zero percent, but that is unrealistic,” said Councilmember Tim Brown.

If it was only his checkbook involved, Brown said he would vote for 8 percent rather than the 5 percent increase he is supporting, but he ended up voting for the 7 percent hike.

The city had no increase in its levy the past two years and it probably should not have done that, he said.

There are so many things in the budget that are out of the city’s control, including gas prices and the cost of snow plowing, said Councilmember Steve Kane.

If the city has a zero levy increase, the council will be in a worse spot when dealing with the budget next year, he said.

The city also has to take into account unfunded mandates from the state. It will need a good strong cash reserve, Kane said.

Before settling on the proposed 7 percent levy increase, the council also considered 5 percent and 6.5 percent increases but neither amount could garner enough votes to pass.

Sandoval said increasing the levy will be a burden for business and residents.

But if the council does not do it this year what it is going to do in 2014, 15 percent? Sandoval asked.

Aug. 20, the council unanimously approved $193,000 in cuts to its proposed 2013 budget, which is still being worked on.

The cuts include:

• $30,000 from street maintenance and repair, which will mean less sealcoating and crack filling of roads;

• $25,000 in tuition reimbursement program elimination;

• $18,000 for miscellaneous contracted services, such as tree trimming;

• $20,000 reduction in contracted planner consultant fees;

• $56,000 with the elimination of the assistant public works director position; and

• $40,000 by lowering the transfer amount to debt service.

Impact

With the proposed 7 percent levy increase, the city’s preliminary 2013 general fund levy will be $3,053,381, which is an increase of $201,121 from 2012.

With its proposed $20,900 debt service levy, the total proposed levy payable in 2013 will be $3,074,381.

Without knowing what property values will be in 2013, Finance Director Darcy Mulvihill said it is difficult to tell what residents will be paying in city property taxes.

The median home value in St. Francis for 2012 was $133,200 and if property values and fiscal disparities remained the same, the homeowner would pay $52 more in 2013, she said.

According to Anoka County Assessor Mike Sutherland, overall property values dropped 12.4 percent in St. Francis for taxes payable in 2013.

Tammy Sakry is at tammy.sakry@ecm-inc.com

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