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Staff writer

The Andover City Council held a public hearing on the 2010 budget and levy Tuesday night with three residents asking questions.

The council will vote on the 2010 budget and levy at its Dec. 15 meeting.

The 2010 gross levy of $10,856,299 is a 2.48 percent increase from the 2009 gross levy of $10,593,520.

One significant reason for the increase is because of a special levy that recaptures lost Market Value Homestead Credit (MVHC) that the state of Minnesota took in 2008 and 2009 to help balance the state budget. Andover is levying an amount of $493,988 as a one-time special levy.

Property owners get the benefit of a MVHC reduction on their property taxes, and in the past, the state would reimburse cities for this lost revenue. However, the state held back MVHC as well as Local Government Aid (LGA) payments to cities in the second half of 2008 and all of 2009.

Andover has not received LGA assistance from the state since the big state LGA cutbacks in 2003 but has lost a lot of MVHC. Andover lost a total of $547,088 in MVHC due to the 2008 and 2009 unallotments, but the council decided to not recapture the full amount.

The state legislature gave cities the option to collect the lost 2008 and 2009 MVHC revenue through a special 2010 property tax levy. If a city council chose not to recover this lost revenue for its 2010 budget, this money could never be recovered through a future special levy.

This special levy is part of a general fund levy increase of $752,258. The general fund levy is increasing from $6,844,236 to $7,596,494. The general fund levy is 69.97 percent of the gross levy amount.

The debt service levy is the next highest levy category, accounting for 17.51 percent of the 2010 gross levy. The debt service levy is decreasing from $2,241,965 to $1,900,566.

Other levies are for capital equipment/projects ($210,000), parks projects ($59,410), road and bridge ($1,003,056) and pedestrian trail maintenance ($51,773). Three of these levies are the same amount as 2009. The road and bridge levy is decreasing from its 2009 level of $1,151,136.

There is also a Lower Rum River Watershed District levy of $35,000, but only residents who live within this watershed district pay this levy.

Andover is budgeting to spend $32,566,661 in 2010. The expenditures are broken out between the general fund ($9,102,628), special revenue funds ($2,365,890), debt service funds ($9,729,276), capital projects fund ($5,628,374), enterprise funds ($4,794,449) and internal service funds ($946,044).

The general fund gets the most publicity because it has to do with day-to-day city operations that the city council regularly discusses.

Special revenue funds the community center operations, forestry programs and Economic Development Authority activity at Andover Station, Andover Station North and the downtown center to list a few examples. Debt service funds pay-off the bond debt of things such as the Andover Community Center/YMCA, open space and various other improvements and equipment purchases.

The capital projects fund is responsible for funding storm sewer, sewer trunk and water trunk improvements and road projects, for example. The enterprise funds consist of the sewer fund, water fund and storm sewer fund. If residents do not have city sewer and water, they are not impacted the same by this fund as others who have these services. User fees fund these expenditures. The internal service funds consist of central equipment and maintenance and risk management expenditures.

Eric Hagen is at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it