The Free Press, Mankato, MN

August 27, 2013

Kato weighs levy choice

Council could raise levy by 1.1 percent or 2.3 percent

By Dan Linehan
dlinehan@mankatofreepress.com

---- — MANKATO — The Mankato City Council has some decisions to make about next year’s property tax levy. Well, actually, one decision.

By increasing the cities’ state aid while setting levy limits, the Legislature made some big choices this spring.

But the city still has a free hand to raise its levy for debt payments, and it probably will.

About $160,000 of that increase, a levy increase of about 1.1 percent, is all but assured. It will pay for loans for projects like the remodeled Public Safety Center and the improvements to the public works headquarters.

At that level, the city’s tax rate would be stable, due to increases in the city’s tax base. In other words, a homeowner whose property didn’t increase in value would pay no more in taxes next year than they did this year.

City staff, though, are also recommending levying $165,000 more to provide a cushion against unpaid special assessments. This would result in a levy increase of 2.3 percent, which has gone up slightly since it was first announced at 1.7 percent earlier this month.

Mankato City Manager Pat Hentges said the cushion increase is “probably not a critical need,” in part because assessment paybacks have risen so far this year. And if they continued to go up, the city might not need to levy this money at all. But it’s impossible to know for sure how much land will get developed — which triggers assessment paybacks — which creates the uncertainty.

At a levy increase of 2.3 percent, a home valued at $157,400 would pay an extra $6.04 in the city portion of its property taxes next year if its value didn’t change. That, again, is compared with no increase at the 1.1 percent increase.

The budget, which the council saw for the first time Monday, also calls for increases of 2 percent in water and sewer fees.

It also includes three major projects: $7.2 million to move the bus facility, $6.9 million for upgrades at the sewer plant and $30 million to expand the Verizon Wireless Center. Of those, the final two are contingent on state grants or loans.

Though the levy will barely rise, general fund spending is projected to go up by $1.2 million. The city will receive $530,000 more in local government aid next year. It will help pay for wage increases of about 2.5 percent, health insurance increases of about 4 percent and about $200,000 more for equipment depreciation.

The City Council will set its preliminary levy, which can fall but not rise before it is certified in December, on Sept. 9.