Ramsey adopted a $15.31 million property tax levy for 2022 — a $2.3 million increase over this year.

The levy represents a 17.7% increase implemented primarily to fund road construction projects, because in July the City Council nixed franchise fees, which previously funded the roads. Additional increases come from personnel costs and the debt service levy.

The City Council approved the property tax levy and budget Dec. 14 in a 4-3 vote. Mayor Mark Kuzma and Council Members Chris Riley and Chelsee Howell opposed the levy.

Kuzma ultimately voted against the levy because he did not support the pavement management fund as a means of replacing the franchise fees.

He said he worried with house values rising due to inflation, the cost of property taxes would increase with it, whereas franchise fees were consistent.

“To me, it’s a poor way of handling our street funding,” Kuzma said. “I’m just not happy with how this is turning out. We’ll see how it plays, but I was much more in favor of the franchise fee.”

During the discussion regarding getting rid of franchise fees, Riley said he’d support an alternative that fully funded the roads to the tune of $1.99 million, like the franchise fee did.

“We are replacing a smaller amount than was being collected before — that’s not fully funded,” Riley said.

Howell voted against the budget because she was against the increase in personnel costs.

“If we had kept those costs down and had been more serious about sitting down and addressing, I guess, what positions we could not add to the budget, we could’ve kept that percentage down for the residents a little bit,” Howell said.

The city’s general fund budget increased by $109,292 over 2021 to $14.49 million. Finance Director Diana Lund said the increase wasn’t larger because even though personnel costs increased, capital equipment expenditures decreased about the same amount.

The city’s pavement management fund increased the levy by $1.67 million.

Starting Jan. 1, residents will no longer pay the $14 per month franchise fee on utility bills. Instead, roads will be funded via the property tax levy.

“This basically replaces the franchise fee that was repealed in July,” Lund said.

Franchise fees amounted to $168 each year per household, regardless of property value. The franchise fees brought in $1.99 million annually, Lund said.

Council Member Matt Woestehoff voiced his disapproval of the pavement management fund as a replacement for franchise fees, but said not approving a budget would be worse for the city, because the 2021 budget is $2.3 million less than the 2022 budget. If the city were not to approve a budget by the end of the year, 2021’s budget would be automatically reapplied.

“Roads are a big problem here,” Woestehoff said. “Our current solution that is on the budget is $300,000 less than we invested in our roads last year, and it’s costing us more.”

He said voting for the budget, regardless of his personal feelings, was his “effort to not make it about politics.”

Council Member Ryan Heineman, who was a proponent for nixing franchise fees this summer, said the council’s common goal is to fix the roads.

“We all saw the same problem, we may differ on the solution,” Heineman said. “We’ve got to fix the roads, and we’ve got to slow spending. I think this is the best option for doing that.”

The pavement management fund accounts for 72.7% of the levy’s increase next year. The remaining factors are the debt levy and personnel costs, Lund said.

The debt service levy increased by $72,079.

The levy for personnel funding increased by $557,742 to account for cost of living adjustments for existing staff and to fund new staff members.

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