The Osseo City Council looked at its 2013 preliminary budget during its meeting Monday, Aug. 27.
A separate story about other council actions will appear in next week’s paper.
Back on Aug. 8, the council discussed the 2013 General Fund Budget during a work session. Since then, city staff has refined the budget based on council direction.
City Administrator Douglas Reeder presented the council with the currently proposed 2013 budget at the Aug. 27 meeting. Over the last three years, the city’s revenues and expenditures “have hardly increased at all,” according to Reeder. In 2012, there was an even budget, with $1,963,200 in revenues and $1,963,200 in expenditures. The projected 2012 revenues were $1,880,076 and projected expenditures were $1,914,783.
The proposed 2013 revenues are $1,881,436 and proposed expenditures are $1,956,226. “You can see the amount of budget increase from 2012 approved to 2013 is actually a lower amount,” Reeder said.
The 2013 budget includes a $50,000 contingency fund, which is $25,000 higher than 2012.
Reeder said the city’s costs have increased, but most of the department’s have budget’s have gone done slightly except for the Police, Legal and Planning Departments. The Police Department is up by .05 percent and the legal costs are up by 3.8 percent due to increasing costs of prosecution. The Planning Department is having a change with personnel — the Planning Intern position will become the City Planner position — causing a $36,084 increase in salary costs.
The 2013 new expenditures would be a total of $149,334. These could include the City Planner position, part-time City Administrator, 2 percent salary increase for staff, 2.2 percent increase for Police, audit cost up $2,000 and the contingency increase of $25,000. There will also be some deleted expenditures totaling $103,627. These include no planning consultant ($21,500), no full-time administrator ($72,927), no election in 2013 ($2,200) and projected utility costs lowered by $7,000.
“The two percent that you budgeted for staff that has not been approved, that is just you are setting money aside so if and when we do that it’s there,” Mayor Al Lindquist asked. Administrator Reeder said that was correct.
Reeder said the council needed to be aware that the 2013 debt levies for the three bonding issues supported by the general taxes would go up by $45,364. The preliminary tax levy for 2013 may go to .89 percent, from $1,026,391 in 2012 to the estimated $1,142,062 in 2013.
He added property values within the city have gone down, but the actually change in city property taxes for an individual tax payer will depend on how much their property value changed. Property owners should also remember the total tax bill is affected by the tax changes of the Osseo School District and Hennepin County has well.
Mayor Lindquist asked how the school district fit into the resident’s property taxes. Reeder said the school district and county set their taxes. “Thirty percent of the total bill you get as a homeowner will be based on what the city does, the other 70 percent is the school district and the county,” Reeder added.
Councilor Duane Poppe said, “We can only do what we can do at a city level. And by managing our expenses and doing things the right way and trying to increase our tax capacity through a constant looking at the TIF districts and constantly trying to increase that tax base we have in the city, that’s all we can do.”
The next steps for the budget will be for it to go the Finance and Budget Committee for more discussion next week.
Then the preliminary budget and tax levy would come before the City Council for approval on Sept. 10. The budget cannot be increased, only decreased, after this point. The tax levy would then be submitted to Hennepin County. Truth in taxation hearings would be Dec. 3 and Dec. 10, with final budget approval on Dec. 10.