State law requires local units of government establish a preliminary levy for the upcoming year by the end of September.

With that in mind, City of Redwood Falls staff presented a preliminary levy to the city council at its Sept. 4 meeting.

The process of coming up with a preliminary levy starts much earlier in the year, said Missi Meyer, who serves as the city director of finance and administrative services.

“We start having meetings with each department in July,” said Meyer, adding at that time they hear the requests from the heads of those departments regarding their needs and wants for the coming year.

From that point, a preliminary levy is established. This year the proposal presented by city staff includes a 4.99 percent increase in the levy over 2017, said Meyer.

The operating levy increase is actually 5.16 percent, Meyer added, but that is offset by a .17 percent abatement decrease for the coming year.

Meyer said the city has not reached an agreement with its three bargaining units, adding the current agreements end as of Dec. 31, 2018.

In order to move forward with a preliminary levy, Meyer said a 2.8 percent salary increase estimate was used, adding the goal is to have two-year agreements in place with those groups prior to the certification of the levy in December.

Meyer added the proposed levy includes a 10 percent increase in the health insurance premium for the city. That increase is due to utilization, said Meyer. However, Meyer also told the city council that the city’s broker has negotiated a better deal for the city that will be reflected in the final levy proposal.

Meyer said it made sense to leave in the higher number for now, as the final levy can be adjusted. However, the city council was reminded the final levy amount can be reduced from the preliminary proposal but it can’t increase.

With new construction taking place, Meyer said the tax capacity will likely increase for the city. However, she said the estimates were not available by the time the city put together its preliminary levy proposal.

Meyer explained that an increased tax capacity means the increase in the levy would be spread over more properties, adding that would indicate that most would not see a 4.99 percent increase in the property taxes they pay. The total proposed levy for 2019 is $2,720,393.

The city council will consider final certification of the 2019 levy during its Dec. 18 meeting. In addition to approving the preliminary levy for 2019, the city council also adopted a preliminary budget for next year, with anticipated revenues of $26,465,895 and $31,048,452 in expenses.

This year the budget proposal does not include the hospital, said Meyer, as the transition from city ownership to private ownership will take place Jan. 1, 2019.

In other action during its meeting, the city council: 

• Approved a change order in the amount of $12,800 for the south substation switchgear project bringing the contract total to $593,550. Chuck Heins, public utilities superintendent, said he anticipates substantial completion of the project by the middle of September.

• Approved a request from Tim Hanna, zoning administrator, to establish a residential demolition assistance program. The program would provide funding to property owners for the removal of blighted or substandard properties in the community. Funds allocated for the program would require a 50 percent match, with a cap of $5,000.

Hanna said over the years the city is seeing an increase in properties that are been abandoned or fallen into disrepair.

The funding would come from the Minnesota Investment Fund grant, and Hanna said once those funds have been dispersed the city would have to determine whether or not to continue the program.

• Approved a grant agreement between the City of Redwood Falls and the FAA in the amount of $1,239,401 for the seven bay hangar project at the municipal airport.

According to Jim Doering, the grant provides reimbursement for 90 percent of the project from the federal government, with the remaining 10 percent coming from the city and the Minnesota Department of Transportation. Each will cover 5 percent of the cost or $68,856.

• Accepted a quote in the amount of up to $20,000 from Schmidt Construction to clean out the stormwater pond by Johnson Park. The pond treats stormwater from the area, said Doering, adding sediment has collected in the pond and needs to be removed to allow the pond to function better.

• Approved a contract with Thriveon in the amount of $93,972 for information technology services. Meyer said with the transition away from the hospital, the city needed to come up with a plan to provide those services that had been shared between the two entities.

A committee made upon of city staff researched options and concluded the most effective option for the city was to outsource those services.

• Approved the employment of Jonathan Mertens as an officer with the Redwood Falls Police Department pending the outcome of a background check, physical examination and other tests.