BAXTER — Baxter City Council members set a preliminary levy 2014 property tax levy at $5,508,200, representing a $58,000, or 1.06 percent, increase compared to 2013.
Mayor Darrel Olson said the 1.06 percent increase comes after two years of maintaining a zero increase.
“I really think the staff did a good job and I appreciate the efforts to maintain that,” Olson said. “At some point we might have to bite a bigger bullet.”
The city needed to adopt a preliminary budget by Sept. 15. Once adopted the budget may go down but cannot go up.
In an Aug. 27 budget session, the council heard the city expects $13,631,700 of new market value from new construction as of Jan. 1, 2013, meaning about $189,000 of new tax capacity. During the boom years, increased tax capacity from new construction was able to decrease the pressure on residential property taxes.
In an overview to the council on Aug. 27, Finance Director Jeremy Vacinek said the 2013 new market value was significant compared to the $1,106,000 added in 2012. The city was using information from Crow Wing County in calculating the numbers. The county reported even with $13,6 million in new construction, the city’s estimated market value is decreasing by $11.8 million to $793.2 million in 2013. Valuations are down countywide by 3.61 percent. The city expects to get updated calculations on tax capacity from the county in mid-September.
Council members were told the biggest drivers for a 2014 operating levy increase came from a proposed $35,100 increase in the fire contract with the city of Brainerd. Initially, Baxter reported it was expecting a contract increase of $7,726 between 2013 and 2014 but received a revised notice the increase would be $27,413 as Brainerd was planning to keep two full-time firefighters after grant funding ran out.
In other additions, the council agreed to raise 2014 funding for the Brainerd Lakes Area Economic Development Corp. by $3,000 to $21,500. The council also agreed to eliminate transferring $40,000 from the general fund to the street reconstruction fund so it could increase its contingency fund by $40,000 to a total of $65,000.
There are multiple options for residents to hear more about the budget and tax levy. The city has a budget work session planned at 6 p.m. Oct. 9, with additional budget work sessions if necessary at 6 p.m. Oct. 22, 6 p.m. Nov. 13, and Nov. 27. An informational meeting to review the budget and tax levy and take public testimony is planned at 6 p.m. Dec. 2 at city hall.
The council plans to adopt a final budget and levy for 2014 at its Dec. 3 regular meeting, which starts at 7 p.m.