Anoka plans another decrease in tax levy

The Anoka City Council and staff continue to fine tune the city’s budget for 2014.

Finance Director Lori Yager is crunching the numbers to include a 2.4 percent property tax levy reduction.

This is the fifth year of either a levy freeze or reduction, according to City Manager Tim Cruikshank.

The proposed levy is approximately $5.76 million – a decrease of just under $96,000 from 2013.

While early budget discussions included a smaller levy reduction, just over 1 percent, Councilmember Jeff Weaver has called on the city to boost that number based on increased Local Government Aid that Anoka will receive next year.

Gov. Mark Dayton increase LGA by $80 million for 2014. Anoka will receive an additional $646,000, for a total of $1.5 million.

While the governor urged cities to use the LGA increases for property tax relief, many cities are instead using the money to pay for one-time projects and capital investments.

Based on the formula for distributing government aid, not all cities get that additional funding and some will only see minimal LGA increases for 2014.

For example, the city of Andover, which received no LGA in 2013, will get approximately $75,000. Coon Rapids, a city that also has not typically received any LGA, will get $934,000 from the state in 2014.

If Anoka used its entire LGA increase for property tax relief, the levy would go down 6 percent, Yager told the council during an outdoor budget work session on the city’s docks Aug. 12.

According to the preliminary budget, the city will decrease transfers in from electric and other funds, but they will still be required.

Cruikshank believes the city should continue to support core services with property taxes.

“The more we decrease taxes now, the more we continue to be dependent on transfers in for operations,” Cruikshank said.

Transfers of $360,000 into the general fund for operating costs will be needed, he said.

The city will also use $800,000 of the general fund balance for transfers to park capital and information services. An additional $60,000 of general fund balance will be used for capital purchases.

This will bring the city’s fund balance to $4.9 million, or 49 percent of operating expenditures. Auditors recommend a city maintain a fund balance of 20 to 40 percent of its annual expenditures, but Anoka is taking a more conservative approach, opting to maintain a larger safety net.

“I like having a savings account,” Weaver said.

Councilmember Steve Schmidt agreed.

The city is planning $3 million in construction projects for 2014, including the second and third phases of Castle Field, street renewal, an upgrade to the entrance at Green Haven Golf Club and the addition of a service road near Anoka High School, Castle Field and the Anoka Ice Arena.

This is the third year of unprecedented private and public investment in Anoka, said Cruikshank. That has included the reconstruction of East and West Main streets, The Homestead at Anoka, a new HealthPartners clinic under construction, the relocation of Castle Field and the current construction of a parking ramp at the Northstar Commuter Rail station.

The city is also looking at adding its first staff position in 12 to 14 years, according to Cruikshank. Since 2008 the city has reduced its employees by 25 full-time positions.

The council is supporting the request for an additional staff person in the parks and streets department.

“Every year we just keep adding more and more for this department to look after,” said Schmidt of the city’s continuing infrastructure additions and improvements, particularly in parks and recreation.

City employees will also see a 2 percent wage increases next year, along with a one-time boost to health savings accounts.

Overall, the city will spend an additional $326,000 in 2014, a 3.1 percent increase over last year. Those salary and benefit increases account for $237,585 of that total.

A shift on paper will also have an affect on the bottom line.

Starting in 2014, the Green Haven Golf Club clubhouse will be classified as a community center – moving it out of the golf fund and into the general fund. This will increase the city’s general fund expenditures, but at the same time it will not be required to show a loss on depreciation every year, said Yager.

Golf course revenues and expenditures will continue to be accounted for in a separate fund, she said.

The city will approve a preliminary budget and levy in September.

Mandy Moran Froemming is at editor.anokaunion@ecm-inc.com

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