Lake Elmo levy increases, tax rate does not

Lake Elmo residents may be frustrated to find that the city’s tax levy has increased for 2006 by 11.74 percent, but little of their ire should be directed at City Hall, as the actual tax rate is holding steady from last year at about 19.37 percent.

After conducting a state-required truth-in-taxation hearing on Dec. 5 at which about eight residents were afforded the opportunity to comment or question the proposed levy and budget, City Council members unanimously approved the $2.1 million levy and $3.6 million budget during their meeting on Dec. 6.

Included in the proposed budget is funding for four new city staff positions to be considered and hired during the next year. In response to anticipated city growth, Lake Elmo expects to hire an assistant city planner, a civil engineer, a full-time fire chief and a code enforcement officer.

“We’re going to be growing and at least two of (those jobs) will be paid for through fees that are a direct result of that growth,” Mayor Dean Johnston said following the meeting.

The two positions that, according to Finance Director Tom Bouthilet, are expected to be self-funded through fees collected on new development projects in the city are the planner and engineer. While it is possible that costs for a fire chief might be offset at least partially through fees for burning permits and inspections, the position will mainly be financed from the general fund. As will the code enforcement officer, unless the city determines similar inspection or service fees in the future.

“We don’t have the ordinances in place to say the code officer could go out and fine people and the city could then justify offsetting the wages for that position,” Bouthilet said. “Seeing as we’re in the infant stages of this new concept, we haven’t taken it to the next level yet.”

During the Dec. 6 meeting, Council Member Steve DeLapp, while finding the budget to be “fair” and lauding Lake Elmo’s “fiscal conservatism,” expressed some doubt about the city’s budget process focusing too much on revenue. Additionally, he noted early hesitancy regarding the new positions the document called for.

“Personally, I’ll say I’m not prepared to vote for four full-time hires,” DeLapp said. The resolution before the council, however, was only to approve the budget; the planner, engineer, fire chief and code enforcement officer will be considered at a later time.

In regards to the budgetary process, City Administrator Martin Rafferty clarified that the determination is made from June until the end of the year through a series of staff and council meetings and several revisions based on a variety of input.

“The reality is that we don’t look at revenue until the staff presents its needs,” Bouthilet said of the proposed levy, which was first agreed upon in September after which it could not be raised. “Our expenditures are worked up and, nine times out of 10, we look at the revenue and go, ‘uh oh, we don’t have enough to cover our expenses.’”

In his presentation to the council, Bouthilet explained that, of the total levy, 39 percent would be going toward School District 834, 32 percent belonged to Washington County, Lake Elmo would claim 23 percent and the final 6 percent would go toward various other sources such as the watershed and mosquito-control districts.

As for the incoming revenue, Bouthilet reported that about 60 percent would be from taxes; about 17 percent from licenses and permits; 9 percent in charges for services; 6 percent for fines and intergovernmental revenues; and 8 percent from other revenue sources.

At the truth -in-taxation hearing, Johnston felt that most resident concerns were focused on the 11.74 tax increase, which Bouthilet attributed primarily to rises in property values. Unfortunately, the mayor noted that the opportunity for residents to voice their complaints about such increases to Washington County is not until the spring.

Nevertheless, Johnston and the rest of the council seemed pleased with the steady tax rate Lake Elmo would be taking into 2006.

“First and foremost in my mind is that we have always been among the cities in the metro area with the lowest tax rate and we were very careful to maintain that situation,” he said. “There were things that needed to be done that we put off. (But) we wanted to make sure that at least the percentage tax rate didn’t go up.”

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