Blaine approves preliminary levy

Although the Blaine City Council approved a preliminary 2014 levy that is higher than 2013, the council made it clear that a lot of discussion remains before the final budget and levy are approved in December.

“We have a lot to be proud of,” Councilmember Wes Hovland said. “We’ve weathered this ‘depression’ very well compared to most cities in the state. It’s due to our conservative nature and the growth we’ve experienced and I think the foresight to look at maintaining our tax rate as low as possible.”

One thing Hovland and Councilmembers Mike Bourke, Dave Clark and Russ Herbst are banking on is a high jump in market values for taxable in 2015. They voted down Mayor Tom Ryan’s motion to increase the tax rate to 37.416, which would have resulted in a total levy of $19,757,000.

The 2014 preliminary levy approved is $19,452,000, which is $727,610 higher than the $18,724,390 levy from this year, but the tax rate will remain at 36.739 percent.

Councilmembers Kathy Kolb and Dick Swanson voted with the mayor on the 37.416 percent tax rate issue, but the proposal failed with the other four councilmembers voting no. With it being clear the 36.739 percent tax rate would be approved, Kolb and Swanson voted for the 37.416 percent tax rate with everyone else.

There were differing opinions on which direction the council should go and Kolb pointed out the council should have had more extensive budget discussions at a retreat. A local weekend retreat last month was canceled because of a councilmember’s work conflict, but all seven elected officials have had trouble finding a date and time that works for everyone beyond the hour-long workshops on Thursday evenings during the month where a lot of other issues beyond the budget are being addressed.

Some councilmembers have talked about hiring a part-time parks director and a building inspector even though the council has not officially discussed this at a workshop, Kolb said.

“It saddens me that we haven’t had that discussion,” she said.

Ryan said the council should approve the higher tax rate because the city continues to get no Local Government Aid from the state, and Blaine is the fastest growing Twin Cities suburb which means roads and parks to maintain for more people.

He has been advocating for the city to fill the economic development director and parks and recreation department director positions that have been vacated, Ryan said.

Ryan also was disappointed that the city lost one of its parks supervisors who left for another job, he said.

“The reserves and retirements are not a revenue source and that’s what we’re doing. It doesn’t say much about what’s in the future,” Ryan said.

The council’s 2014 proposed budget calls for a half-a-million dollar draw-down of the unrestricted reserves and this comes one year after the council used $440,000 of this reserves fund to keep taxes lower, he said.

Clark agreed with Ryan that Blaine shouldn’t continue to use its reserves and rely on people leaving so much, but he said Blaine cannot continue spending the way it has and is frustrated the council has not been able to reach more compromises on ways to reduce spending after it went through a year-long assumption based budgeting review.

Clark also spoke about a discussion last year about cutting $100,000 from the 2013 budget, which he said did not happen.

“I’ve been working my butt off to try to get flexibility, to try to change the way we spend so we can become more efficient, do more with less, so we’re not killing our staff saying you have to do everything you did last year, but with 10 percent less budget. That’s not fair to staff,” Clark said.

Herbst in workshop meetings has discussed the high market value increases coming for tax purposes in 2015, saying he has heard it could be 15 percent. The most recent figure the council has heard is 12 percent. This increased valuation helps the city’s budget.

“I think the city is in good shape,” Herbst said. “I think when you get to times like this, the (budget) leaning down the city did was miniscule compared to what a lot of other people had to do.”

Finance Director Joe Huss said it is too early to speculate on the city’s taxable market valuations for 2015. The raw data on 2015 probably will not reach the city until February. Huss said the council is seeing anecdotal information that homes are selling at 12 to 15 percent more than last year, but that does not mean the taxable market value for the entire city will increase by that much.
“I have no idea if it will be in the area of 12 to 15 percent or 2 to 5 percent,” Huss said.

Huss said the number of foreclosures as well as the type of homes being sold might not be comparable from one year to the next.

Blaine’s taxable market value for 2014 is 1.3 percent higher than 2013, Huss said

Swanson does not think the city has done a bad job because it, but “what scares me is if we don’t get that 12 percent next year, we basically don’t have any reserves and we’re going to have a major discussion around this table about dramatic increases in the levy or dramatic cuts.”

Hopefully this will not happen and the reserves draw-down the council has authorized over the last three years will be seen as brilliant, he said.

“I’m proud we’re able to spend our constituents money responsibly,” Bourke said. “I think we’re doing an excellent job.”

Ryan said he knew he would get voted down, but he wanted to raise these issues. “I won’t stop bringing it up because I’ve spent a lot of my life here and so have a lot of other people and I think we’re slipping big time,” he said.

Eric Hagen is at eric.hagen@ecm-inc.com

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