Baxter begins budget process: Trails among top priorities for city
BAXTER--It's that time of year again, when local government entities begin work on next year's budgets. Baxter City Council members and staff met Tuesday, July 24, in a work session to begin the process of discussing their 2019 goals and prioriti...
BAXTER-It's that time of year again, when local government entities begin work on next year's budgets.
Baxter City Council members and staff met Tuesday, July 24, in a work session to begin the process of discussing their 2019 goals and priorities in preparing an annual operating budget for 2019. It's an initial step with plans to officially adopt a preliminary property tax levy Sept. 18. Once set, the levy can decrease but cannot increase. The city's levy must be certified to the county and state by Sept. 29. Adoption of the final budget and the finalized levy will be Dec. 4.
The city is still putting the hard numbers together, but council members noted a few capital projects they would like to see as priorities in 2019.
Council member Quinn Nystrom, who attended a Baxter Parks and Trails Commission meeting Monday night, said there was a lot of discussion on the Oakwood Trail proposal. Commissioners were concerned about safety, as there is a large curve on the road where the trail would go. The trail would begin near Whipple Beach on Oakwood Drive North and continue on Cedar Scenic Road. Nystrom said the park commission is willing to have this trail project be a priority, but it would drain most of park dedication funds.
Council member Todd Holman said the Oakwood Trail was one of eight projects on his priority list. Other projects on his list include a Paul Bunyan State Trail crossing by Arbor Glen Apartments; to fix the Paul Bunyan trail entrance into Baxter on the Paris cul-du-sac, south of the city; to pay for a silent railroad crossing so the city in 2021 can construct the Inglewood Drive intersection change; and adding to the Mississippi River Overlook Park more mowing, signage and maintenance.
Holman said he would like to see the Paul Bunyan State Trail rerouted on the east side of Highway 371, build a park off Riverwood Road with trail parking and have the trail end on Forestview Drive. He also would like to extend Cypress Drive to Woida Road.
Finance Director Jeremy Vacinek said the city's 2018 operating budget is $18.2 million. In the coming weeks, staff will put the budget together for further discussion by the council. Vacinek presented the council with potential impacts to the city budget and said there would be no significant changes in state aid or taxes. He said there are no levy limits in place for 2019, as the tax bill was vetoed at the end of the 2018 legislative session. Vacinek said the city continues to not be eligible for local government aid.
Personnel costs impacting the budget, per Vacinek's presentation, include:
• Unknown health insurance rates for 2019. Renewal of insurance is scheduled in late August. The city typically accounts for a 12 percent increase, until the actual increase, based upon claims experience and pooling, and what is known about PERA Police and Fire Plan retirement contribution rate increases for 2019 and 2020, according to Vacinek's presentation. The current member contribution rate is 10.8 percent of salary for 2018, increasing to 11.3 percent in 2019 and 11.8 percent in 2020. The employer contribution rate is 16.2 percent of salary, increasing to 16.95 percent in 2019 and 17.7 percent in 2020.
• No PERA Coordinated Plan retirement contribution rates increase is planned for 2019. The current member contribution rate is 6.5 percent of salary for 2019, and the employer contribution rate of 7.5 percent of salary remains unchanged for 2019.
• The 2019 labor contracts need to be determined.
• The addition of a full-time equivalent police officer, which was approved July 17. This addition resulted in an estimated $116,300 increase in department expenditures for 2019, with about $76,900 of the cost paid by the Brainerd School District for a school resource officer.
Other factors impacting the 2019 budget include the League of Minnesota Cities Insurance Trust projecting an additional 8 percent for workers' compensation premiums, Vacinek said. The LMCIT also is revising its pricing structures for automobiles in 2019, rates for police vehicle coverage will increase and the trust is anticipating up to a 4 percent increase for property coverage and a 6 percent increase for municipal liability.
The city of Baxter also is looking at a 4.37 percent increase in its fire contract with the city of Brainerd. Baxter budgeted $303,342 for this year. The city also anticipates a $22,000 increase in funding for the prosecuting attorney.
Baxter's total estimated market value of property-including residential, commercial and industrial-is $950,013,800 for taxes payable in 2018. The estimated market value for taxes payable in 2019 is estimated at $983,333,330, a difference of $33.3 million or a 3.51 percent increase.
Vacinek presented the council with the past 10 years of the city's net tax capacity. In 2009, the net tax capacity was $13.5 million and in 2018 it is $12.2 million. The net tax capacity hit a low of $10.4 million in 2014.
The council will meet next at 6 p.m. Aug. 28 in another budget session to review and discuss the 2019 governmental funds budgets and proposed property tax levy.