By Clay Schuldt
Special to the Caledonia Argus
A special meeting of the Caledonia City Council was called Sept. 6 to discuss the preliminary 2013 tax levy. The levy needed to be approved at the Sept. 10 council meeting because the information is due to the county auditor by Sept. 17.
The council deliberated at length the actual amount of surplus Caledonia would receive if the tax levy was left unchanged. Initial estimates put the surplus at $205,891, but after a second glance the council decided the surplus was significantly lower.
While certain line items could not be estimated due to Caledonia’s ongoing negotiations with city employees, it was estimated that an increase of at least 4.55 percent to the levy will be needed due to increases in debt and tax abatements.
In order to avoid cash flow issues the council would like to eventually maintain a general fund with $500,000. In order to reach this goal over time the council said an increase to the levy would be necessary.
“I’d rather be conservative with less surplus and then have extra money at the end of the year, then the other way around,” Mayor Robert Burns said.
“If we need at least $20,000 more to cover benefits and salaries we have to go up to eight percent,” Council member Paul Fisch said.
Currently for 2013, Caledonia will have $19,299 in debt. An eight percent increase to the tax levy would give the general fund an additional $23,000. Fisch also said that with several upcoming projects, it made better sense to go with the eight percent increase.
The evening’s work serves as a rough draft of the levy proposal.
Once submitted, the council is allowed to lower the levy prior to submitting a final request, but once the percentage for the preliminary budget is set the council cannot raise it any further.
“We’ve always done our due diligence as far as looking at our line items,” Burns said.
Last year the council set the preliminary levy at a six percent increase, only to cut it to three percent on the final levy.