Posted: 12/18/07
City council approves 16% levy increase and $2,038,000 budget
By Charlie Warner
Argus News Editor
Although the Caledonia City Council approved a levy increase of 16 percent for 2008, the city's budget increased just $8,980 over last year's budget, which is a four-tenths of a percent increase. The council approved the 2008 budget, which is $2,038,390, and the 16 percent increase in the property tax levy, which will generate $494,952. The council action was taken during the Dec. 10 meeting.
The levy increase was approved by a 4-1 vote, with Councilman Gary Klug dissenting. Klug felt with Houston County proposing a 15 percent levy increase, the 16 percent increase in the city levy would be too much for residents to handle.
City Administrator Bob Nelson explained the 16 percent increase in the levy was recommended because both he and city accountant Stephanie Mann felt the city needed to catch up and quit being so dependent on the electric department to bail the city out. Last year the city transferred $111,000 from the electric department's enterprise fund to balance the budget.
"We just can't keep doing that," Nelson said.
"How did we get to this point?" Mayor Mike Morey asked.
Nelson said it was a combination of drastic cuts in local government aid (LGA) from the state, the imposing of cities paying sales tax on items purchased and years of levy limits.
"We took a double hit (when the state experienced the $4.3 billion budget shortfall four years ago) with the LGA cuts and having to suddenly pay sales tax on purchases," Nelson said. "And when you factor in the levy limits the state also imposed on us, we couldn't even keep up with the rate of inflation, let alone those extra hits from the state."
Councilman Paul Fisch agreed with the 16 percent levy increase. He pointed out Caledonia's levy per capita was the lowest of any city in Houston or Fillmore counties in 2007. "If we don't do something this year, we're just going to have to make larger increases next year," he cautioned.
"If we don't continue to try to manage this (the city budget), it's just going to snowball," Mann pointed out. "The 16 percent increase was recommended because it's only going to get worse if we don't do something now. There were many cuts in the city budget this year. Many of those cuts are things that are going to continue to crop up."
"I feel the city staff has looked at the situation. I feel we have made many cuts to the proposed budget. I feel it's better to be safe than sorry. I agree with the recommendation," Councilman Bob Standish said.
A motion was made by Morey to set the levy increase at 16 percent. His motion was seconded by Standish. Morey, Standish, Fisch and Councilman Randi Vick supported the motion. Klug voted against it.
With the 16 percent levy increase and substantial cuts in the proposed 2008 budget, the city will only be transferring $23,850 from the electric department, which is an $87,150 improvement over last year's transfer.
Caledonia Argus
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