Prior Lake City Council finalizes 5.8 percent levy increase

Prior Lake American

The Prior Lake City Council certified a property tax levy increase of 5.8 percent for next year on Monday, up from last year's 4.4 percent rise but about 1 percent less than the preliminary expectation.

The council also sent city staff back to the drawing board for next year's budget, since a proposed budget had been based on the higher expected levy of 6.7 percent proposed earlier this year. The council didn't determine what items should be reduced but directed city staff to keep an additional $80,000 police officer position regardless of what else gets cut.

A tax levy determines the amount of property tax for the year and is based on the value of a home, and in practice not all property owners see the same increase because of fluctuations in property values. With the 6.7 percent preliminary tax levy, about 50 percent of homes in Prior Lake would have seen a tax increase of 3.4 percent or less, Finance Director Cathy Erickson said. She added a home valued at $338,100 would have seen an increase of $37, barring increases in home valuation.

Similar data for the now-lower levy weren't available by press time. Erickson said the average proposed tax levy increase for cities across the state is 6.2 percent.

Prior Lake City Council members Zach Braid, Annette Thompson and Kevin Burkart said they weren't comfortable with the 6.7 percent levy as proposed, though the addition of a police officer should be maintained in the budget.

"There has to be something that isn't direly needed," Thompson said. "Everything isn't direly needed."

Prior Lake City Council member Mike McGuire introduced a motion to keep the levy as is, which was voted down 3-2. Prior Lake Mayor Kirt Briggs also voted in favor of maintaining the levy as it was proposed.

"We need to break this vicious cycle where we don't save but we bond for it so we're giving an illusion that we're assisting our taxpayers," Briggs said. "While nobody wants a tax increase, reducing the levy gives a false appearance of lessening the tax burden."

Prior Lake has had the highest crime rate index in Scott County for two years but the fewest sworn officers. Total calls for police service increased from 17,312 calls in 2016 to 18,323 in 2017.

"We think it's extremely important you retain an additional police officer in the budget next year," said Prior Lake resident Woody Spitzmueller, who sits on the Community Safety Advisory Comittee for the city. "Our department services calls and has no staff for enforcement."

Prior Lake police officers are on track to have overtime hours equal to 3.5 full-time employees by the end of 2018, according to council documents. The overtime equates to an additional 10-hour shift per week per officer.

"It's not like we haven't been paying attention and working on it and making progress," Thompson said regarding additional police officers. "We're aware of it, and we have been adding (police officers)."

The stated goals of the budget are to establish financial stability for all funds, put in a comprehensive strategy for funding capital needs, ensure sufficient resources and staffing, attract and retain a "high-caliber" workforce, maintain a quality local street system and seek community engagement, according to council documents.

At a work session in August, the council discussed methods to lower the proposed preliminary tax levy, including having some projects come from the general fund reserves as opposed to the levy. At another meeting in Nov. 5, the council decided to wait for public comment on where to cut to lower the levy.

About 4.4 percentage points of the nearly 6.7 percent levy increase, or $525,000 in levy revenue, was deemed "mandatory," such as wages and benefits, police overtime, salt and ice management, fuel replenishment, debt service and an Economic Development Authority levy.

Another 1.6 percentage points included $50,000 for trail replacement, $50,000 for equipment replacement and $95,000 for street overlay. For the past couple years, $100,000 for trail rebuilding has been cut from the budget in order to keep property taxes level. The funding covers redoing and maintaining about a mile of trail each year, city officials have said.

Several city residents have spoken in favor of the higher potential levy. Kim Churchill, who sits on the Citizen Engagement Committee, said $37 is worth the services the city provides, referring to Erickson's numbers on the impact for a homeowner.

"We live in one of the best cities in the state of Minnesota," Churchill said. "You get what you pay for."

Churchill added: "I think we live in a great city, and part of the reason we live in a great city is we maintain it well. We have a lot of good things about our city."

Former city council member Steve Millar said he supported the full, 6.7-point levy increase due to various funds such as trail replacement and equipment replacement being underfunded in the past.

"We are kicking that damn can down the proverbial road," Millar said. "What I've seen happen is, by doing so, you wind up spending a larger amount of money down the road when you finally do address those needs, and in some cases a much larger amount of money."

On the other hand, former mayor Wes Mader said there's room to cut.

"I have no doubt that a fiscally competent individual dedicated to the concept of reducing spending to the minimum required to meet basic needs could easily eliminate some of the unnecessary expenses we have and eliminate the need for a tax levy increase," he said.

Less than 1 percentage point of the 6.7 percent levy was proposed to be for the addition of a city clerk, starting in July, and a police officer to start in February. For metro area cities with a population of 20,000 to 30,000, Prior Lake is the only city without a full-time dedicated city clerk, according to the council agenda report. A city clerk would be responsible for preparing council agendas, scheduling meetings, managing records, administering elections, issuing licenses and more.