The Albert Lea City Council on Monday approved the city’s 2011 budget and tax levy, which will result in an at least $20 a year tax increase for city residents with homes valued at $100,000.

The budget and levy are the same as the proposed levy and budget that were passed in September. The levy could have increased an additional $353,000, according to state guidelines.

Albert Lea Mayor Vern Rasmussen said he thinks the $150,000 levy increase is appropriate and noted that, from this point on, any cuts to the city will more than likely mean cutting city employees, which will in turn affect services.

The budget was made with the assumption that there will be a 10 percent increase in health insurance costs, a step increase for all eligible employees, a 23 percent increase in electrical rate costs through Alliant Energy and a local government aid allocation that was higher than in 2010.

It also includes a 1.5 percent decrease in tax capacity in 2011 from $11 million in 2010 to $10.8 million in 2011.

The levy, specifically, was approved at $5.227 million, with the general fund budget approved at $14.03 million.

The levy includes expenses to operate the general fund, the public improvement revenue bond debt service fund and the capital improvement bond debt service fund.

The debt service levy was approved at about $557,000, which in itself will increase taxes on a $100,000 home by $9.

Councilors also voted to use a surplus in the Police Department from 2010 to pay for one officer’s salary in 2011. This position was paid for in 2010 mainly by union concessions.

Councilors credited the Police Department for being able to save roughly $160,000 to $170,000 during 2010 compared to what was budgeted. The remainder of the department’s savings will go back into the general fund.

There will be no changes to the library, pool and utility billing window hours, which were decreased in 2010. Several departments will operate with less full-time staff, the council has reduced its discretionary funds and City Hall custodial work is being completed by Albert Lea firefighters.

Sixth Ward Councilor Al Brooks was the only councilor to vote against the levy, but ended up voting in favor of the budget.

Brooks said he did not think the council had the ability to discuss the budget a lot after Finance Director Rhonda Moen accepted a job as finance director in Owatonna and added that he thought there might have been ways to cut room in the budget and lower the levy. He said the council relied a lot on what Moen suggested before she left.

No one spoke during a time allowed for public comments about the budget.

In other action, the City Council:

• Approved two union contracts.

The first is for American Federation of State, County and Municipal Employees Local 1018, representing public works personnel.

The agreement includes a 1.25 percent cost of living wage increase, with eligible employees receiving a step increase. The city will pick up 100 percent of the health insurance increases, and flexibility was added to allow the scheduling of 10-hour shifts.

The second is for the International Association of Firefighters, Local 1041, which represents most of the city’s firefighters.

The agreement shows eligible employees receiving a step increase, with the city picking up 100 percent of health insurance increases.

• Witnessed the swearing-in of new Albert Lea police Lt. Darrin Palmer. Look to the Tribune for more on Palmer.

• Amended the signatories for the city to include Rasmussen, Brooks, Interim City Manager Pat McGarvey and Sandy Bera in the finance department.

• Authorized McGarvey to approve purchases over $500.

• Authorized the use of tax increment financing receipts.

Each year in July and December the city receives a payment of tax increment from the county along with the property tax payment. As the tax increment is received, the funds are used to either repay advances from the general funds or to reimburse developers for their own TIF projects.

• Approved a request to block off Frank Hall Drive from Third Street to Fourth Street on Feb. 19 for the third-annual winter carnival to be held in conjunction with The Big Freeze at Academy Park.

• Approved a burn permit for Ulland Brothers.

The permit will be for some trees on the south end of Ulland’s pit on Plaza Street that the city requested the company bulldoze.

The trees were reportedly obstructing the ability of pilots from being able to see each other when they took off from the airport.

• Re-appointed Community Development Director Bob Graham to the Family Services Collaborative board.

• Called a public hearing for water and sewer rates at the next council meeting Dec. 27. Look to the Tribune for more details about the proposed rates.

• Had the first reading of an ordinance amending the city code regardling illicit stormwater.