General fund levy hasn’t increased since 2013

 

The Albert Lea City Council on Monday approved a preliminary 5.56% increase in the overall tax levy for 2020.

The overall levy includes a 5.08% increase in the general fund levy and a 7.05% increase in the debt service levy, which pays for street projects.

The vote passed 6-1, with 6th Ward Councilor Al “Minnow” Brooks voting against.

Albert Lea Finance Director Kristi Brutlag said the city has not had a general fund levy increase since 2013. She estimated that under the preliminary increase approved, a home valued at $100,000 would actually see a decrease in taxes by almost $10 if the value on the home remained the same because of the decrease in the tax rate. However, because the city’s tax capacity has increased and some homes are seeing higher market values, it’s likely some will see higher taxes simply because the values of their homes have increased.

Freeborn County Assessor Ryan Rasmusson said at the workshop prior to the meeting that the city’s tax capacity grew by about 7% in 2019, with the largest increase in values coming from residential properties.

He said whether a house’s value increased varies by neighborhood.

Brutlag said under the preliminary general fund levy increase, that levy would be set at $5 million.

With a 7% increase, the debt service levy would be set at $1.66 million.

The preliminary general fund budget was approved at $16.98 million.

She said increases in the general fund budget included increases in personnel costs — including a 3% cost of living adjustment — $30,000 for elections staffing in 2020, $175,000 for the implementation of a compensation study, $25,000 for a fire and police Public Employees Retirement Association increase, a $50,000 increase in hazardous property removals and $25,000 in expected utilities costs for the new fire station.

The preliminary levy, which has to be approved each year in September, can be lowered in December when the budget is finalized, but it cannot be raised.

Brutlag pointed out preliminary levies in other communities in southern Minnesota including Austin at 4%, Faribault at 8.4%, Owatonna at 4.5%, Rochester at 6.3%, Waseca at 9.3% and Winona at 4%, among others.

She said in the coming months, department heads will continue looking at where cuts can be made in their budgets. The council is also looking for trends and areas that can be lowered in an effort to reduce the levy increase before December.

Albert Lea Mayor Vern Rasmussen Jr. said the goal is to reduce the levy and get it down as low as they can.

Brutlag said after eight years without a general fund levy increase, she was not surprised that the city would not be able to sustain that for another year. After making many cuts in recent years to counter increased personnel costs, she said she thinks this year will be more difficult when trying to pare down the levy increase and make other reductions.

“I believe the honeymoon is over,” she said.

In the coming months, city staff and the council will also start reviewing the capital improvement plans for 2020 through 2024. They will review budgets for the sewer and water funds, solid waste fund, airport and senior center, as well as review the fee schedule for 2020.

In other action, the council:

• Set the preliminary Albert Lea Housing and Redevelopment Authority tax levy at $109,000, which is the same as 2019.

The levy covers money for a housing study, residential rehabilitation, standard property demolition, Section 8 fee offsets and public housing reserve.

• Approved separating parcels owned by Carrington Co. at Northbridge Mall, 2510 Bridge Ave., to allow for separate lot sales.

• Approved a $50,000 matching grant for facade restoration at 200 N. Broadway under the Broadway Ridge Renewal Grant Fund. First Ward Councilor Rich Murray abstained from the vote because of his involvement with the project.

• Called a public hearing for Oct. 28 on proposed assessments for delinquent water and sewer accounts.

• Called a public hearing for Oct. 28 on proposed assessments for street work done on Clausen Avenue, High Street, Sheridan Street and Giles Place.

• Called a public hearing for Oct. 28 on proposed assessments for street work done on Newton Avenue.

• Declared Oct. 12 as Hometown Pride Cleanup Day and authorized reduced rates at the landfill that day for city residents. The event runs from 9 a.m. to noon.

Brush and yard waste, household garbage and demolition debris will be free to dispose.

Other rates include $10 for an appliance, sofa or mattress; $5 for another furniture piece; and $3 for a passenger car tire.

• Amended the zoning and land use map for properties off of East Main being annexed from Albert Lea Township.