Baxter looks at 1.7 percent tax levy increase for 2015

BAXTER - A tax levy of $5,601,900 for 2015 - representing an increase of $94,000 or 1.7 percent compared to 2014 - is proposed for the city of Baxter.

This year "new construction" took a substantial uptick, adding about $9.1 million for taxes payable in 2015, which generated about $116,409 in tax capacity. Compare that to taxes payable in 2014, where new construction was $1.1 million creating $11,000 of tax capacity.

In his report to the council, Jeremy Vacinek, Baxter's finance director, noted Crow Wing County's announcement that countywide property value assessments increased by 1 percent reversing a six-year trend of decreasing market value. The county's estimated market value dropped by 20 percent from 2008 to 2013.

Baxter City Council members met in a Tuesday night work session to discuss the 2015 proposed budget and property tax levy.

The work session provided an overview of revenues and expenses by each department, included items to be cut and considerations for spending.

The proposed budget represents $1.2 million for debt service, $4.4 million for operations, $3.9 million for general fund operations and $507,500 for other funds.

Spending included $15,000 for The Center, formerly the senior activity center, $5,000 to the Initiative Foundation, $8,000 to Fourth of July fireworks, and $5,000 for public transit in the Dial-A-Ride.

In general fund expenditures, the city noted costs include $1.6 million for police personnel, supplies and services with $45,000 for fuel, $20,000 for animal control and $63,500 for future squad car replacement costs.

For fire protection, Baxter expects to pay $297,700 in 2015, an increase of 6.35 percent from 2014's $279,900.

Council member Jim Klein questioned why the fire costs were going up when the city should be seeing a reduction.

"They overcharged us last year and now they are going up another 6.35 percent," Klein said.

Heitke noted two more participants dropped out of the fire service district leaving fewer people to share the cost. Administrator Gordon Heitke said the fire advisory board is concerned about it and is looking at ways to be more efficient, perhaps by sharing equipment between departments that respond for mutual aid.

"I think everyone is concerned about what is happening," Heitke said.

Klein said he thought they were being sandbagged by old-timers in the fire department and as areas no longer being served should mean a reduction in cost as well. Heitke said some of those areas only had two or three fire calls a year.

"We have to find out who is going to stay and what does it take to serve those districts," Mayor Darrel Olson said, noting the district lost $70,000 now. "I know what you are saying Jim and those questions are being asked."

Klein wanted to know how many fire calls per year were in Baxter to warrant $297,700. Vacinek reported there were almost 76 calls per year.

Klein also wondered about costs associated with watering the soccer fields at Southdale with the Brainerd School District now using its new athletic field for soccer. The city noted the junior varsity games will all still be played at Southdale along with Baxter's spring and fall soccer programs.

Overall, the city had 39 employees in 2013 and now have 41, which is expected to be steady in 2015. The city's sales tax collection is expected to increase by $70,000 with motor vehicle fees bringing in an additional $5,000. The local option sales tax is expected to generate $2,250,000 in 2015 and the motor vehicle excise tax to bring in $110,000. The lodging tax is expected to bring in $310,000, of which the city retains 5 percent, or $15,500, to administer the fund.

The council looked at a request from the Brainerd Lakes Area Economic Development Corp. (BLAEDC) to increase funding by 14 percent, or $3,000, to $24,500. The city funded BLAEDC with $21,500 in 2014 and is proposing to increase it to $22,500 for a 4.7 percent increase.

Items initially proposed for the budget but selected to be cut included $20,500 for an additional outdoor warning siren, $58,000 for two public works trucks, $39,500 for a squad car and $58,900 for a skid-steer with snow blower and angle broom attachments.

Council Todd Holman said if there is a schedule to replace the vehicles, he wanted to be thoughtful about that and not create a potential backlog in future years. Holman said he wanted to be sensitive to the city adding operational costs such as a city planner but not coming at the expense of equipment. Heitke said with a squad car at 67,000 miles, the thought process was that vehicle could go one more year. Money is being set aside in the budget to save for vehicle replacement.

"Could we get another year out of it?" Heitke said. "The answer to that is yes."

Council members noted the benefits to a skid-steer in keeping trails and ice rinks clear and multiple uses across departments. It's been a talked about budget item for years but was always cut. Holman suggested revisiting that as a budget amendment.

Council member Rob Moser was absent.

Next steps include a 5:30 p.m. Sept. 2 budget work session for the council.

The council is expected to adopt the budget and the proposed property tax levy at 7 p.m. Sept. 16. At 6 p.m. Oct. 8, the council is expected to meet in a work session to look at the water and sewer budget. The city is expected to adopt the final 2015 budget and levy at 7 p.m. Dec. 2.