Posted in the Prior Lake American: Tuesday, December 22, 2015 6:00 am
By Lori Carlson editor@plamerican.com
Prior Lake City Council members finally settled on a general fund levy and budget Monday night, and the decision will raise residents’ taxes by 6.5 percent.
The general fund portion of the city’s levy increase amounts to 1.42 percent. Added to already-approved levies for debt service and revolving equipment funds, the total increase in the 2016 city levy is 6.5 percent.
Of the $29.44 million total budget, the general fund accounts for $13 million of spending planned in 2016.
For the owner of a $300,000 home, the 2016 levy hike amounts to roughly a $65 tax increase. The owner of a $670,000 home would pay about $130 more in the coming year.
After months of debate, public input and attempts to whittle down the originally proposed 11.5-percent levy increase, the council remained fairly divided right up until Monday’s vote. In a workshop immediately before their regular meeting, council members challenged each other on everything from line-item fine tuning to broad philosophical differences.
Council Member Annette Thompson tried to hold firm on her demand that the city find places to cut spending to avoid a tax increase, though she ultimately voted for the 1.42-percent levy jump. Council Members Monique Morton and Richard Keeney favored no more than a 6.5-percent increase, while Mayor Ken Hedberg and Council Member Michael McGuire pushed for at least a 7.5-percent increase to cover growing expenses.
At 6.5 percent, McGuire argued, the city will be hard-pressed to fulfill a planned hiring of a police officer (several officers have retired this year) or to fill an open spot in the public works department. Keeney conceded that the city might have to use additional reserve funds to meet those demands, though Boyles said at least in the short term, the city would save money by hiring an officer at a lower salary step than the retiring officer being replaced.
Keeney then took aim at the city’s capital debt.
“My main concern is the large increase in debt service based on hefty capital spending,” Keeney later said, pointing to major projects over the past few years, such as the County Road 44/Ridgemont Avenue/Main Avenue reconfiguration near the entrance to Lakefront Park.
McGuire and Thompson sparred over whether there was any room for budget cutting, while Keeney and Morton said if pressed to make cuts, they’d prefer “people over stuff” [such as new IT equipment].
Hedberg said a 2.5-percent general fund budget spending increase “basically covers our salary and benefit costs” under union contracts and health insurance increases, leaving not much else for maintaining services and improving infrastructure.
Also factored into the 2016 budget is a $20,000 increase for police training and development, most of which the department is contractually required to provide for two union officers who plan to go back to school in 2016, said Police Chief Mark Elliott. In the fire department, volunteer paid-on-call wages went up from $11.85 per hour to $12.20 per hour, said Fire Chief Doug Hartman. The fire department also hired 10 new firefighters this year.
Boyles said despite the fire department increases, the city’s contracts for service with Credit River and Spring Lake townships will bring “significant revenue” back to the city.
One potential bright spot is an expected $160,000 bump in building permit revenue in 2016 from the four-story senior apartment complex planned by Dominium Development Co. on the site of the former Gateway shopping mall.
“But those multi-family projects hit randomly — we can’t rely on that revenue steadily,” Hedberg said. “We’re not going to get another 160 grand from another multi-family project.”
Article from the Prior Lake American: http://www.swnewsmedia.com/prior_lake_american/news/local/council-approves–percent-tax-hike/article_5a35bb6c-a0cd-5443-b08e-0fa5202f8fc7.html