Rosemount council sets preliminary levy
City portion of taxes will decline on
median value home
by Laura Adelmann
Thisweek Newspapers
For the second time in as many years, Rosemount property owners can expect the city portion of their property tax to be reduced.
Rosemount City Council members on Sept. 7 approved the $16.7 million 2011 preliminary budget, which will cut the average homeowner’s city portion of their property tax by $64 next year.
In 2010, city taxes on an average property were cut by $77.
Those lower tax payments are part of the reason the city’s planning on having $364,700 less in its budget from 2010, a drop of 2.14 percent.
The city is planning to lose 5.08 percent in its tax base from 2010 and 8 percent in residential values, said Jeff May, city finance director.
In addition, the city is continuing to budget assuming it will not receive its Market Value Homestead Credit funds from the state of Minnesota, an assumption held since 2007.
Next year, that funding, had the Legislature approved it, would have returned $429,507 to the city.
Reductions planned
The budget situation came as no surprise.
Anticipating the fallout from reduced development, falling property values and general economic conditions, city staff and council spent much of this year considering and implementing some changes in future operations and plans.
Early in the year, council members began the budget process by setting goals, then reviewing possible money-saving options.
As a result, the preliminary budget includes cutting a Parks and Recreation tiny tot program that had been losing popularity, reducing the number of city newsletters and park brochures produced and also reducing travel and conference budgets.
But one of the biggest moves the city made that allowed the city to reduce its 2011 levy was the decision to pay down its debt using the 2009 surplus funds.
May said that paying off two debts saved $190,000 in tax levies for 2011.
In addition, the city used 2009 surplus funds to pay for outdoor warning sirens and police records software, a decision that has so far stopped an increase in the city’s Capital Improvement Program Fund.
However, there may be a need to replace vehicles next year, an issue the council will discuss in a future meeting.
In another money-saving measure, the city will incorporate a higher deductible on its insurance in 2011.
May said there is enough money in the city’s insurance fund to buffer the risk.
According to May, the city avoided raising its street CIP fund by the previously recommended 6 percent annually to just over 1 percent in 2011.
The adjustment was possible because of low inflation and fewer construction projects.
Rising costs
While cuts were made, there were also increases in the preliminary budget, including a union-negotiated 1.5 percent salary increase for the city’s 78 full-time employees.
At first, May anticipated a 10 percent health insurance premium increase, but has budgeted for an 18 percent increase.
The city is shopping for better rates, but won’t receive bids before the city must adopt the levy and budget; adjustments may be made later to accommodate any reductions.
Other expenses include budgeting for a loss for the Steeple Center’s premier year, with $87,500 in expenses and $13,500 in revenues anticipated in 2011.
Over half the expenditures ($46,000) are for utilities.
State law requires the city to adopt the preliminary budget and levy by Sept. 15; the final budget will be adopted by Dec. 26.
A public hearing on the budget was set for Dec. 7 at 7:30 p.m. at City Hall.
Laura Adelmann is at dceditor@frontiernet.net.
