Click here, tax graph3 col, to see a graph of Elk River’s property tax levies.
by Joni Astrup
Property owners in Elk River will pay $9,853,835 in taxes to fund city operations in 2014.
While that’s a chunk of change, what’s noteworthy is that the city’s property tax levy for 2014 is actually less than it was in 2008 and 3 percent or $321,930 lower than the amount levied a year ago.
It was the City Council’s intention all along to collect less property taxes in 2014 to offset a pavement management plan implemented this year. Under that plan, a monthly franchise fee is collected from residential properties and businesses and used for street maintenance such as road reconstruction, overlays and seal coating. It eliminates the need to assess properties and collect property taxes for that purpose.
Council members noted that fact before approving the budget on Monday.
“Before we pat ourselves on the back too hard for our decrease in our tax levy, some of that is attributable to the fact that we’re now charging a franchise fee,” Mayor John Dietz said. Still, he noted that even without reducing the property tax levy to offset the new revenue from the franchise fee, the levy would still go down.
The bottom line is virtually every business in Elk River should see their property taxes for city services go down in 2014, Dietz said. The average home should see a slight decrease.
Specifically, for a $169,622 home that saw its value go up 2.5 percent, taxes for city services will go down about 1 percent or $5.49 next year, while a $1 million commercial-industrial property that experienced a 1 percent drop in value will see a 5 percent tax decrease, or $461, according to Finance Director Tim Simon.
Dietz said the city has done a very good job trying to hold the line on the budget.
The city’s general fund budget of $12.8 million will remain almost the same from 2013 to 2014.
The budget and the levy were approved Monday in a 4-1 vote by the City Council, the culmination of a lengthy process that included 10 budget work sessions starting last summer.
Dietz cast the lone vote against the budget because he felt strongly about some staffing issues. See story on page 7.
Fast facts about Elk River’s 2014 budget
Here are other facts about Elk River’s budget, according to Simon.
•Property taxes fund the bulk of the city’s budget, making up almost three-fourths of revenues. The rest comes from a variety of sources including fees, building permit revenues, interest income and state aid.
•There are no new services in the budget.
•There are a few staff changes planned next year including the addition of one full-time parks maintenance operator as well as one full-time deputy fire chief (starting July 1). The budget does eliminate a vacant full-time building inspector position. It also includes a 2 percent cost-of-living pay increase for all employees.
•Overall, property values in Elk River appear to have stabilized following several years of decline. After dropping by about 9 percent last year, the taxable market value of property in the city has risen nearly 2 percent to $1.6 billion.
Simon called that piece of news “a positive economic indicator.”
•Residential property values in Elk River increased 2.5 percent in the past year after five years of decline. Commercial-industrial properties continue to hold their value with a slight decrease.
•Two-thirds of Elk River’s tax base is made up of residential properties, followed by commercial (19 percent) and apartments (4 percent). Industrial and agricultural properties account for 2 percent each.
•City services (general fund budget) cost Elk River residents $46.35 per capita per month. Of that, $21.61 goes for public safety, $11.08 for general government, $6.73 for public works and $6.71 for culture and recreation.
•In a comparison of property taxes for cities in Sherburne County, Elk River city taxes on a $150,000 home for 2013 were more than in Becker and East St. Cloud, but less than in Zimmerman, Big Lake, Clear Lake and Princeton.
•Sanitary sewer rates are proposed to go up 3 percent in 2014; there are no changes proposed to the garbage rate.
•A $12 million sewer plant expansion is planned in 2014.