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ELY CITY GOVERNMENT

Council weighs near status quo levy for 2013

Terry Jackson
Posted 8/31/12

ELY - During Tuesday’s study session, city councilors here appeared to agree that any increase in the city’s levy for 2013 will be small, and may well remain the same as in 2012, pending further …

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ELY CITY GOVERNMENT

Council weighs near status quo levy for 2013

Posted

ELY - During Tuesday’s study session, city councilors here appeared to agree that any increase in the city’s levy for 2013 will be small, and may well remain the same as in 2012, pending further work to achieve budget savings.

Acting Mayor Jerome Debeltz presided at the study session regarding the proposed budget and tax levy. The council plans to approve a preliminary budget and levy at their next regular meeting, set for Sept. 4.

Interim City Clerk-Treasurer Terry Lowell explained the process of establishing a preliminary property tax levy to members of the council. He said the city needs to adopt a tax levy by resolution and send it to St. Louis County by Sept. 15.

“Your council meeting on Sept. 4 is the only scheduled meeting you have to set and discuss the levy,” said Lowell. Changes can be made between the time the preliminary tax levy is set and adoption of the final budget by the end of the year, although the levy can only stay the same or be reduced, never increased.

Lowell said 90 percent of the funds needed to operate the general fund come from three sources:

1) Property taxes (23 percent);

2) Local Government Aid (LGA) and other state aid (64 percent); and

3) Franchise fees (3 percent).

According to Lowell, cities typically property taxes to offset any reduction in LGA in order to maintain the level of city services paid by the general fund. With the city facing consistent reductions in LGA, Lowell said the city has to either reduce services or raise new revenues to pay for them. “Pay me now or pay me later,” quipped Lowell.

Lowell said the city does have ways it can reduce the property tax burden on the citizens. Lowell pointed at a reduction in contributions to civic organizations as one consideration. “Another is to consider a sales tax as a source of revenue in the future,“ said Lowell. Counselor Warren Nikkola added, “We may be able to retire some of our debt early with anticipated sale of city property.” Proposed staffing changes in the library and administration will further reduce the tax burden.

Operations Director Harold Langowski responded to Counselor Mark Zupec’s concern about reimbursing the general fund for prior debt at the airport. “We had a similar situation with the utilities,” said Langowski. “The water and sewer fund owed the electrical fund a substantial amount of money and a decision was made to cancel the debt and move on.” Langowski suggested the books could also be balanced with the airport and general fund. In the meantime, additional revenue can be derived from use of the airport and customs dock.

Although a decision cannot be made at a study session, it appears there is a consensus to increase the 2013 levy by 0.80 percent. If so, that would represent a $13,100 increase from $1,640,800 (2012 budget) to $1,653,900 (2013 budget).

“The preliminary tax levy can still be reduced between now and the end of the year,” reiterated Lowell.