Andover approves 2014 budget, levy

The Andover City Council Tuesday, Dec. 17 unanimously approved the 2014 budget and a levy that results in a 2 percent tax increase.

The Andover City Council unanimously approved the 2014 budget and levy Tuesday evening, Dec. 17. Photo by Eric Hagen

The Andover City Council unanimously approved the 2014 budget and levy Tuesday evening, Dec. 17. Photo by Eric Hagen

The total levy in 2014 is $10,843,925. Approximately 68.57 percent of this goes to the general fund for day-to-day operations, 19.1 percent will be dedicated to pay debt service most notably for the Andover YMCA/Community Center, and 12.33 percent is for capital equipment purchases and the watershed levy.

The 2013 amount was $10,631,299, which was the same amount as 2012. The 2014 levy is still slightly less than the 2010 and 2011 levies as well, the city of Andover pointed out.

Expenditures for the general fund will be increasing from $9,619,929 in 2013 to $9,996,375 in 2014, which is a 3.9 percent increase.

Two residents asked questions about the budget and levy before the council approved it.

Jim Junker wondered, “how many millions are we in debt and how are we going to pay for it?”

City Administrator Jim Dickinson said the city currently has over $40 million in debt, but about $18 million of that will be off the books by the end of 2014, in part due to the council’s previous actions to refinance the community center debt.

Although a property tax levy will be paying for some of the community center debt until 2034, Dickinson said the remainder is scheduled to be retired in less than 10 years. The YMCA also contributes $635,000 annually and revenue collected at the facility offsets some of the costs.

The biggest cost is for the general fund and public works items such as roads projects, along with police and fire, which account for 72.4 percent of all expenditures.

About 79 percent of the general fund revenue comes from property taxes, and with approximately 90 percent of Andover’s tax base being residential, Dickinson said. Residents are impacted by changes in the budget but individual business owners are affected even more because they pay more in property taxes.

Andover’s property tax rate of 43.791 percent is also one of the lowest in the county, Dickinson said. Only Nowthen, Ham Lake, Oak Grove, Linwood and Blaine are lower.

Gary Rolli said he used to be employed by the U.S. Air Force and recalled how if it did not spend money allocated to them, it would go somewhere else.

Councilmember Sheri Bukkila said that is not the case for Andover. For example, the council and city staff annually review a five-year capital improvement plan that forecasts a wide range of infrastructure improvement projects to roads, parks, sewer and water systems and capital equipment purchases. Some items are pushed back if the need for it is not there.

“Just because it is in the book in black and white doesn’t mean it is going to happen,” she said.

Rolli noted that his street was scheduled to be worked on next year, but said a city public works employee did such a good job patching the road next year that “you may be able to wait until 2015.”

Nevertheless, Rolli said the tax increases do hurt him, especially when his in-home business is still struggling due to the economy.

“I’m just trying to keep my head above water,” he said.

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

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