Lake Elmo passes 22 percent increase in city property taxes

Lake Elmo residents can expect a 22 percent increase in the city portion of their 2018 property taxes, in contrast to 2017’s 5.2 percent reduction.

Despite the jump, the owner of a median-valued home can expect a just more than $100 increase on their tax bill for next year.

The Lake Elmo City Council passed a $3.6 million property tax levy for 2018, which is about  $650,000 over 2017.

During the Dec. 5 budget meeting, Finance Director Brian Swanson noted that the increase could have been even higher.

Swanson said the library in Lake Elmo is now a part of the Washington County Library system, meaning the city cannot levy property taxes in 2018 for the library, as it did in 2017. 

He added that if the library component of the 2017 levy were removed for an apples to apples comparison, the 2018 levy increase would be closer to 30 percent. 

Council member Julie Fliflet noted that residents will still end up paying the library levy through the county, even though it is no longer included with the city property tax levy.

Mayor Mike Pearson said during the meeting that 2018’s steep increase was partially because “[w]e picked the fruit from the tree that was ... planted for us,” referring to the 2017 transfer of $150,000 from the reserve fund to reduce debt and support general fund expenses. This transfer made 2017’s tax reduction possible.

Council member Justin Bloyer added that another cause of 2018’s tax increase is the many years of deferred maintenance on city roads and equipment.


Where the money goes

Swanson explained that the Lake Elmo property tax levy is made up of two components: the general fund, which finances the city’s day-to-day operations, and the debt service, which pays for items such as street projects and capital purchases like vehicles and equipment. 

Swanson explained that the largest portion of the city’s property tax levy is the $1.2 million debt service component, which accounts for about 33 percent of the total levy. Debt service is about $340,000 more than last year. 

Debt service is being paid for the downtown project, recent dump truck and plow truck purchases, improvements on Olson Lake Trail and street improvements in the North Tri Lakes area.

The $4.67 million general fund budget, which was passed with the property tax levy, makes for a roughly 18 percent increase over 2017. 

Swanson explained that a number of anticipated spending increases were reflected in the general fund. Some examples include the addition of an assistant city administrator position, citywide wage adjustments, contracting out the finance director position and a change in the fire department staffing model, from a volunteer to hybrid model incorporating some part-time staff.


‘Death of fiscal responsibility’ verses ‘theater of the absurd’

Median-valued homes in Lake Elmo will likely see a city tax increase of just over $100, or about 14 percent in 2018. Median-valued homes increased in value from about $378,000 in 2017 to about $383,000 in 2018, just over a 1 percent change.

During the meeting, Fliflet voiced concerns about the steep increase residents will be expected to pay on the city portion of their taxes. 

“I think it’s a fair statement to say that fiscal responsibility is dead,” Filflet said.

She made a motion to pass a levy with a no tax increase for residents, but was unable to provide her fellow council members with a strategy to reach that goal, saying only that she thinks spending is out of control.

“I managed to lower taxes for two years for residents with thoughtful and deliberate fiscal responsibility, and it is a really sad day for me to see a budget come forward like this for the residents of Lake Elmo. They deserve better,” said Filflet, who chaired the finance committee for two years.

“We [had] fire trucks literally have their pumps fall out on Highway 5,” Bloyer said, underscoring the need for new spending. “We had a firetruck break down on the way to a fire. We had calls that no one showed up at or one person showed up at.”

“We had to make a decision,” Bloyer added. “The citizens of Lake Elmo do deserve better than what we’ve had for the last generation. They deserve, when you make a call to 911, that someone shows up and helps you get out of your house.”

Swanson explained that in order to keep the tax rate the same as it was in 2017, $410,000 would need to be cut from the general fund budget. He added that 8 percent of the property tax levy is for debt service, which can’t be changed.

“This is a theater of the absurd here, and it’s detrimental to our process and the staff and everything,” Pearson said of Fliflet’s proposal.

Fliflet’s motion to keep the tax rate flat failed with a 2-3 vote. Only Fliflet and council member Jill Lundgren voted in favor of the motion. The staff-recommended 2018 general fund budget and property tax levy passed 4-1, with Fliflet dissenting.

– Aundrea Kinney can be reached at 651-748-7822 or   

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