The City Council held a special workshop last night to continue deliberating on the proposed 2008-2009 City budget. I led off the night with a presentation of the newest version of the budget, which we call version 1.8. Version 1.8 looks like this:
City Services: City service levels in v1.8 are similar to the City’s current level of services. The two employee positions in our Housing & Community Services Division that had been proposed for reduction have been included back into v1.8. V1.8 also includes a new Police Officer, new IT employee and new Facilities employee at the Community Center in 2008. It also includes the reduction of three staff positions in 2009 through attrition. It provides a market rate wage increase for City employees in both 2008 and 2009. It also plans for all new amenities to open on time at the Community Center in 2008. General Fund spending increases 4.8% in 2008 and 3.1% in 2009 in v1.8.
City Taxes: You can’t have City services without City taxes. Taxes increase in 2008 and 2009 under v1.8. However, I believe the tax increase can be fairly described as very modest by any reasonable standard. The City property tax increase for the Median Single Family Home required to fund v1.8 will be less than 1.0% in both 2008 and 2009. For the taxpayer in the Median Single Family Home (valued at $374,800) that tax increase is $9.00 in 2008. Not $9/per day. Not $9/week. Not $9/month. That’s a $9 increase for the year. It’s another $9/year increase in 2009.
V1.8 keeps current City services in place and limits the rate of growth of City taxes. What are we doing in v.18 that makes this rare combination possible? Two things. Thing #1: We are Transferring In $250,000 from reserves into the General Fund in 2008 and another $250,000 in 2009. Thing #2: We are reducing our annual $1,000,000 Capital Improvement Plan tax levy to $750,000 in 2008 and to $900,000 in 2009. The impact of both these actions is that they both add revenue to the General Fund, which means the City can lower the level of tax it needs to collect in 2008 and 2009.
There are many details in a $40,000,000 annual operating budget. Many indeed. But we’re working through them and we’ll be ready to go with our annual Truth-In-Taxation hearing on December 3. That’s the Big Night for city budgets across the state of Minnesota. We’ll be ready with our final budget by then.
