After two failed motions, the third time was the charm for the Brainerd City Council to set the preliminary 2020 tax levy at a 4% increase over this year.
The final levy, which will be approved in December, can be lower but not higher than the preliminary levy.
An initial motion for a 2% levy increase from outgoing council member Sue Hilgart failed at the Monday, Sept. 3 council meeting.
A failed motion for a 3% levy increase from council member Dave Pritschet followed. Though several council members said they would like to see it lower, council member Kevin Stunek’s suggestion of a 4% increase was the winning number on a 4-3 vote, with council members Dave Badeaux, Gabe Johnson and Hilgart opposed.
Stunek noted that number isn’t set in stone and can be lowered in December.
Council President Johnson would like to see it much lower -- at 1%, roughly the amount needed to simply balance the budget.
“The government isn’t in the business of turning profits. We should be balancing the budget,” Johnson said. “... There’s no point to tax just for the sake of taxing people, and we’ve been doing it for the last couple years, and I don’t like it.”
Badeaux went a little farther, saying he would like to see no increase if at all possible in the future.
“I think we’ve made a lot of changes at a city level to try and save taxpayer money. I think we’ve cleaned up a lot of expenditures that we were otherwise wasting some money on,” Badeaux said. “I think it’s time to show the citizens of Brainerd that we really are looking after their money. And if we continually increase the levy with higher percentages every year, we’re not sending that message to them.”
Pritschet said while he may be open to a 1%, 2% or 3% increase for the final levy, he would rather set the preliminary higher just in case other expenses come up, with the knowledge it can be lowered in December.
One unanswered question that may affect the final budget is the state of the roof on the city’s annex building, where the drivers license testing facility currently resides.
With the current lease ending Oct. 31, the council agreed earlier in the meeting not to renew another proposed three-year lease, mainly because of concerns with the building’s roof. After a recent inspection by county maintenance staff, the roof was found to have major issues, City Engineer Paul Sandy said. Those issues include material falling off in places, along with substantial water damage inside, Sandy said.
The council agreed to explore other lease options with the license testing facility -- like month to month if necessary -- while also getting further clarification on the status of the roof and what repairs it may need.
While discussing the levy, City Administrator Cassandra Torstenson reminded council members the roof repair could be a substantial cost they may want to budget for. She said that cost will likely be clearer before having to pass the final levy.
Mayor Ed Menk, who does not vote except in the case of a tie, said he would like to see the city set a higher levy and start a depreciation fund to save money for any unexpected facility needs -- like the annex roof -- in the future.
Johnson noted the council does have a capital fund, though, which has money in it available for facility updates and other expenses.
A 4% increase would make for a 2020 levy of $6,131,395, or $235,823 more than the 2019 levy.
Taxpayers with residential property valued at $120,000 would see an annual property tax increase of about $0.54 with the 4% levy increase. In the same situation, taxpayers with commercial property valued at $363,500 would see an annual property tax increase of about $5.97.
During a budget workshop last week, Finance Director Connie Hillman said she expects the city’s expenditures to increase by about $471,000 in 2020. A few of the major factors behind that increase is an extra police officer, increased employee health insurance rates and increased funding to Sourcewell for assistance on the city’s Riverfront Project and comprehensive plan update.
The council scheduled a public hearing on the final levy -- a time for residents to voice their opinions -- for 6 p.m. Dec. 9. Council members can either adopt the final levy then or wait until their next regular meeting the following week.