After two bond referendum questions failed in November, the Lake Shore City Council adopted a general revenue tax levy for 2019 that is lower than the preliminary levy adopted in September, but still significantly higher than the 2018 levy.
The council on Monday, Dec. 17, adopted a levy of $1,045,802. That compares to a 2018 tax levy of $818,307, for a $227,495 increase (27.8 percent). The council also approved an overall budget of $1,268,269 (20.9 percent higher than 2018), and a 1 percent cost-of-living increase for employees.
The majority of the tax levy and budget increase stems from $200,000 earmarked for road improvements and $18,000 for increased Pine River Area Sanitary District costs. Staff said the city is spending less overall though by contracting with PRASD rather than having a full-time city public works director, citing $44,000 less in total wastewater expenses compared to five years ago.
The tax levy is $100,000 less (12.22 percent) than previously proposed and than what was shown on taxpayers' preliminary property tax statements they received in the mail in November. Those statements showed a 40.02 percent levy increase. And the final budget is 9.54 percent less that the preliminary budget adopted in September.
Taken out of that preliminary tax levy was $60,000 in city hall interest payments since the majority of voters in November cast votes against issuing general obligation bonds for a new city hall, and $48,000 in road project interest payments since the majority of voters cast votes against issuing general obligation bonds for road improvements. An additional $8,000 was then added to engineering in public works, based off of what the city spent this year.
Eight people spoke during a public hearing regarding the city's proposed tax levy and budget, and the city received one letter. Questions and comments varied, but most followed the theme of the $200,000 levy increase for road improvements. Some said when voters opposed using general obligation bonds to pay for road improvements and a new city hall, that meant they opposed the projects entirely, not just the method of payment.
Council member Krista Knudsen said it's unfortunate the way the referendum questions were worded, because they specifically asked about issuing bonds to pay for the projects, not whether voters supported the projects themselves.
Mayor Kevin Egan said the council had to respect voters' choice not to issue bonds for roads, and now has to increase the levy to pay for road work.
The council indicated agreement with residents who said having both big projects - a new city hall and road improvements - on the ballot was just too much.
While council members already agreed not to consider a new city hall building in the next year, they indicated they can't ignore needed road improvements. In the past, the city budgeted $50,000 a year for roads, but now is behind on improvements so must budget more for projects. If the city doesn't maintain streets, in the long run it will pay far more money for major road reconstruction, city engineer Dave Reese, of Widseth Smith Nolting, said.
When asked if the $200,000 is a one-year allotment toward roads, the council said that amount will likely need to be levied for the next several years for road work.
"Small contributions are regrettably catching up with us," Egan said.
Council member Wayne Anderson said the city has a five-year capital improvement plan for roads. Reese said that five-year plan totaled $1.6 million to fix a list of roads using general obligation bonds. The city is now back to a pay-as-you-go method, and $50,000 doesn't go far, Reese said.
Resident David Aamodt said it appears the city has a history of poor planning because it didn't allocate enough for the future, "and now we're all caught up in it."
Resident Aaron Anderson asked if the council had discussed other areas to cut the budget, such as the police force.
"Options should be on the table when voters clearly say 'no' to two referendums," he said. "Other options need to be put out there."
After approving the levy and budget, the council approved a proposal for for $23,500 for engineering services for 1.3 miles of street improvements on Bass Lake Road, Bass Lake Trail and Schaefers Point Road.
Police reported 98 incidents from Nov. 26-Dec. 17, including 64 traffic-related incidents and 34 miscellaneous calls for service. Police issued 56 traffic warnings and six traffic citations, and recorded one each theft and burglary complaint.
Nisswa firefighters held elections, with Shawn Bailey re-elected chief and Joe Hall chief 2. Captains are Justin Stahnke, Nate Peters and Matt Jorgens.
Firefighters had 20 calls in November, including 15 emergency medical services calls. The department has a new fire truck.
In other business Monday, the council:
• Learned Arvig Telephone Company (TDS) is upgrading the telecommunications system serving Lake Shore.
The upgrade will increase broadband capacity to enable higher internet speeds and support video service starting in mid-2019, a letter from TDS says, though the council said that wouldn't reach all residents. The new video service offers about 375 digital channels, including all the broadcast and cable channels that would typically be offered on a traditional cable television system.
The company will ask the city for a cable franchise in January, as required by federal law.
• Issued five land-use permits in November for total valuation of $130,000. Permits included a guest cabin, two accessory structures and two grading/shoreline alteration/steps.