by Joni Astrup
Early estimates from the Sherburne County Assessor’s Office show that Elk River’s net tax capacity has shrunk by roughly 6 percent in the last year, reflecting a decline in home and property values.
While the 6 percent figure is very preliminary and expected to change, the number is setting the stage for what promises to be a trying process of putting together the city’s 2012 budget.
The Elk River City Council held its first budget work session on Monday, June 13. The council has to set a maximum 2012 property tax levy in September and adopt the final budget and tax levy for next year in December.
Council Member Paul Motin said the city has tried to be as austere as possible, and issues are starting to appear.
“I think we’re getting to the point on certain things within the city where it’s starting to crack,” he said.
Motin believes the city needs to look at levels of service, and to maintain them may need to consider increasing personnel to avoid burnout. There may be some services the city can’t continue to offer, he said.
And, he said the city may have to raise property taxes.
But Mayor John Dietz said he doesn’t want to raise property taxes or the city’s tax rate.
Elk River levied $11,112,391 in property taxes this year — which is exactly the same amount as in 2010. But the city’s tax rate still went up slightly because the net tax capacity decreased by 3 percent last year.
Dietz, meanwhile, wants to hold the city’s fund balance at 41.5 percent of the budget. It was at 48.5 percent or approximately $6 million at the end of 2010, but a portion was assigned to the 2011 budget and an amount available for subsequent years’ budgets, thus leaving the 41.5 percent for cash flow purposes. Dietz also would like to put more of a payment from Elk River Municipal Utilities into the city’s general fund.
In addition, he said the city of Ramsey saved about $165,000 in 2009 by contracting for building and electrical inspection services — something he thinks Elk River should look at. “I’m not saying that we should definitely do this, but I think we should take a look at it and see what the cost savings would be,” Dietz said.
Council Member Nick Zerwas agreed the city should investigate it.
Other budget notes:
•The last cost of living adjustment city employees received was 1.5 percent in January 2009.
•The city received no state aid in 2010 and isn’t anticipating any in 2011. Elk River Finance Director Tim Simon calls it “one of our least reliable revenue sources.”
•The city uses about 90,000 gallons of fuel a year. With prices up over last year, Simon warned the council that budget item will increase. The city anticipates using the state fuel contract again in 2012.
Elk River gets ‘clean’ opinion on 2010 audit
The city of Elk River got an unqualified or “clean” opinion on its 2010 audit.
Andrew Berg of Abdo Eick and Meyers, a certified public accountant and consulting firm, told the City Council June 6 a clean opinion is “the opinion you’re looking for.”