Lake Elmo city council passes preliminary levy

Residents can expect a decrease in city taxes

On Sept. 20, the Lake Elmo City Council passed the community’s preliminary 2017 property-tax levy, which is $31,778 less than this year’s levy.

The total proposed levy was $3,080,426, and was made up of three components: the $256,957 library levy, the $874,622 debt service levy and the general fund levy. The general fund levy would have been $1,998,847, but $50,000 from Lake Elmo’s reserve fund was applied to bring it down to $1,948,847.

“Just a reminder: the preliminary levy can be reduced but it can’t be increased,” Lake Elmo finance director Cathy Bendel explained at the meeting.

According to Bendel, the State Auditor’s Office recommends maintaining between 35 and 50 percent of the general fund expenditures in a reserve fund.

“Lake Elmo’s reserves have averaged 78 percent for the last five years and the 2015 reserves were at 86 percent. 2016 is projected to come in significantly better than budget, which will increase the reserves further, which is why the use of a very conservative amount was proposed by the City Finance Committee,” Bendel explained.

“The City Finance Committee is a strong advisory committee to the city staff and city council and played a large role in the budget/levy preparation for 2017,” Bendel added

While the Lake Elmo City Council agreed to spend some of the reserve fund, the council was not in agreement on where to spend it. For instance, Mayor Mike Pearson said he believed the city should use the reserve fund to pay down debt or replace needed equipment for the fire department or public works department. But council member Julie Fliflet disagreed and shared her belief that the money should be spent towards the general fund to keep from “overtaxing” the residents.

Pearson also commented that he thought the city’s budget was relying too heavily on temporary sources of revenue.

Bendel explained via email after the meeting that Pearson was referring to “fees generated due to new homes being built” such as building permit fees and plan review fees.

“Total expenses are budgeted and you subtract fees for service projected to your general fund levy amount,” Bendel explained.

The city council approved the preliminary 2017 property-tax levy with a 3-2 vote with Pearson and Bloyer dissenting. 

According to Bendel, the proposed 2017 levy decreased $31,778 overall from last year’s levy, so the average Lake Elmo homeowner with a property valued at $415,200 would pay about $65 less in the city portion of their property taxes next year. 

The preliminary tax levy represents the maximum amount that the Lake Elmo City Council can set at its truth-in-taxation public hearing in December. 

The preliminary tax levy needed to be certified by Washington County by the end of September.

 

Aundrea Kinney can be reached at 651-748-7822 or akinney@lillienews.com.

 

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