Preliminary Levy
Each year the city goes through its budget cycle for the
upcoming year. The process starts in
mid-year and a preliminary levy needs to be set by September 15th. This number then is used to generate notices
to property owners about the pending amount of taxes for the next year. The final levy is then set after a public
budget meeting that is held in December.
The Finance Committee of the city accomplishes the majority
of the work on crafting the proposed budget.
They look at the financial statements on a monthly basis and understand
how the city is tracking in terms of expenditures. Developing the budget is somewhat an
extension of that review but it also is a means of developing policy regarding
how revenues are spent and what amount of tax should be levied.
Over the past several years the city has experienced a
decline in taxable values. These
declines have occurred for several reasons.
Leading the change is that of declining property values due to the
economy. Real estate was perhaps
over-heated in value and a correction was needed much like that occurs in the
stock market. We also saw a number of
valuation challenges. As a property
owner, you have a right to challenge your taxable value and one method is to
use the tax courts. Rulings have been
made that have reduced values within our community.
The City Council has been sympathetic to issues of rising
taxes and has kept the city’s tax levy in check for a number of years. The total city levy, which includes debt
service, from 2010 is listed below. You
will note the final levy in each of these years has been flat or reduced during
this time period.
2010 Total
Levy $1,779,090
2011 Total
Levy $1,728,480
2012 Total
Levy $1,728,480
2013 Total Levy $1,719,080
In developing the budget for 2014 council goals included
making some improvements to roadways, stepping up deferred maintenance. The Road Improvement line item was increased
from $25,000 to $91,000 for 2014.
Accomplishing this task took some work to look at existing reserves in
the debt service fund with an eye towards paying off 2 bonds early. With the reduction in debt service
requirements it became possible to budget for these improvements. Even so the first draft of the budget showed
an additional levy of $34,000. The
Finance Committee asked if the budget couldn’t result in a further reduction to
make a flat levy again. This would mean
the fifth year in a row the levy was held flat or reduced from the previous
year.
Further restraint was placed on the budget getting to a flat
levy but it was stated we’re at a point where it may be difficult to meet
budget. The city was also shown
additional costs for employee health insurance.
This cost is currently an employee obligation but the extent of increase
could be difficult for employees to handle.
It was suggested that the council increase the preliminary levy to
consider this cost.
After considerable discussion the council felt a cushion was
needed at this time. The preliminary
levy can be reduced but not increased. A
$34,000 increase in the preliminary levy was made, making the total levy
$1,753,080. As the council considers the
budget in more detail, adjustments will be made to determine the final
levy.
