The City of Redwood Falls establishes a budget each year that includes estimated revenues and the expenses required to operate. That budget was adopted during its Dec. 20 meeting when the council held the public budget and levy presentation.
The expenditures for 2017 are estimated at $62.3 million, said Missi Meyer, director of finance and administrative services for the city, with estimated revenues of $48.8 million.
Other funding sources help cover the difference, and among those streams is what is known as the tax levy. The city proposed a levy of $2,503,7539 for 2017, which represents an increase of 6.13 percent over the $2,359,087 actual levy for 2016.
The tax levy, explained Meyer, makes up just over 4 percent of the funding used to run the city. The 2017 levy was also adopted by the city council.
The levy dollars coming into the city are used in various programs and departments, with public safety receiving 26 percent of the levy. Mayer pointed out the city council has made a significant commitment to its culture and recreation and library programs, as the two together make up 34 percent of the tax levy.
“That is a large amount for a city of our size,” said Meyer,
How much an individual pays in taxes each year is based on the total tax capacity of the city.
That number, explained Meyer, is based on the total taxable market value of property in the city multiplied by the classification rate (i.e. residential or commercial).
The tax capacity for 2017 is based on the tax base established this past Jan. 2, which means any property additions or changes made after that will not be calculated in until this coming January and will then be included in the next tax capacity figures for 2018.
“There will be some new partners this year who will share in the levy,” said Meyer, adding the total tax capacity for the city continues to grow, which is good news as it shows that development growth is happening.
There has been a lot of obvious development over the past year, said Meyer, and that development will be included in the calculation this coming Jan. 2.
Another source of funding for the city is what is known as a payment in lieu of taxes (PILOT), which is paid to the city by city-owned and operated entities, such as the hospital, public utilities and the municipal liquor store.
The total PILOT payment coming into the city for 2017 from these sources is $992,343. The PILOT payments to the city were also adopted by the city council.
Meyer said the city also receives an annual allocation of funds from the State of Minnesota through the local government aid (LGA) program. The city has received information that its certified LGA amount for 2017 is $1,463,033, which is a slight increase over the $1,457,287 it received in 2016.
The city budget also shows a negative in its expenses over revenues based on the hospitals anticipated facilities improvement project and master plan work that has a price tag of $11.3 million.
While that project is going to be run through the hospital’s budget as a city-owned entity those costs have to be included in the annual expenditures category of the budget.
After adopting the levy, PILOT payments and budget for 2017, Mayor Corey Theis offered words of thanks on behalf of the city council and the community for all of the hard work and hours put in by staff to accomplish this task.