The city of Isanti has set its proposed 2021 preliminary tax levy at just under $3 million, up slightly from the 2020 levy of $2.7 million.
During the Isanti City Council meeting Sept. 1, Finance Director Mike Betker explained from this point forward, the preliminary tax levy can only be decreased. The City Council will set its final tax levy at its Dec. 1 meeting.
Betker said the proposed 2021 preliminary levy reflects an increase in the preliminary taxable market value for 2021 of 10.71%. He said that number reflects around 100 new home constructions a year.
Betker explained the proposed preliminary tax rate is 61.18%, the same as it was in 2020.
“Fundamentally for any resident, what that means is, if you’re home doesn’t go up in value, your city tax will not go up in value, your city tax bill will not go up,” Betker said. “There’s nothing we can do about county or school, but we can take care of our stuff.”
Council Member Steve Lundeen noted there’s nothing the city can do regarding a property owner’s home valuation/property value. The home valuations are determined through the Isanti County Assessor’s Office.
“Over time, the best thing we can do is try to keep the line on the tax rate and over the years try to slowly plug away at bringing it down little by little by little by little,” Betker said. “As I run my projections out into the future, I see a clear path at being able to do that; I can’t promise it. But when I run my projections out, I see a clear path to a declining tax rate, not an increasing tax rate.”
Betker noted the average tax rate from 2006 through 2020 is 67.63%; and the average tax rate from 2016 through 2020 is 74.77%.
Betker said general fund expenditures have been adjusted based on prior year actual costs, current expenditures through June, actual maintenance agreements and contracted costs. All wages include a 3% cost of living adjustment for 2021 and include the necessary step increases, where applicable. Dental insurance, worker’s compensation, property/liability/volunteer insurance and life insurance have all been adjusted to reflect premiums paid in 2020 and any necessary inflationary factor was applied.
Betker said health insurance is projected to increase 5% and final renewal numbers on health insurance will be available Oct. 1.
Betker explained the components of a municipal budget include operating revenues and expenditures; intergovernmental revenues/expenditures; capital projects; and capital maintenance and replacement.
“Considering those four budget items or budget categories, in the end, fiscal management is really simply, if you’re going to have your tax rate go up or down, you want it to go up or down slowly,” Betker said. “You don’t want big ups, big dumps. You don’t want big double-digit increases, you don’t want big double-digit decreases. People generally are willing to pay their tax if they know what they are getting, but the thing they hate the most is a surprise. They do not want to open their tax bill and see a giant surprise. So if we’re going to have it go up, let’s have it go up slowly. If we’re going to have it go down, let’s have it go down slowly.”
The elements making up the 2021 proposed levy include general fund levy, $1.9 million; capital maintenance levy, $438,700; street construction levy, $286,500; Economic Development Authority levy, $86,201; Abatement levy, $13,432; Debt Service levy, $281,630; 2011 general obligation bond, $9,367; 2014 tax abatement, $222,036; and 2014 general obligation bond, $50,227. The total 2021 preliminary levy sits at $2,987,163.
Lundeen applauded the efforts of Betker and all city department heads for helping to keep the property tax rate the same in 2021 as it was in 2020.
“You’re doing a great job, Mike, you really are,” Lundeen said. “And I do have to say, I think all of our departments are doing a great job by do cutting the brass tax out of things and what’s needed and what really isn’t needed. ... I think all of our department heads are doing a great job. I’ve always been a person when you deserve a pat on the back, you deserve a pat on the back. And I really honestly have to say, I think you have all done a fabulous job.”
CARES Act funds
City Administrator Josi Wood explained the city received $454,377 in CARES Act funds.
Of those funds $100,000 is designated for payroll reimbursement; $24,000 for personal protective equipment, public safety and health expenses; $147,000 in emergency management and $82,000 for technology and software support.
Wood said after these expenses, $101,377 remains. She said the Isanti Fire District also made some requests for CARES Act funds to help with some purchases.
Following discussion, the council made a motion to designate $24,000 to the Isanti Fire District and have Wood work with Fire Chief Al Jankovich on the spending of those funds.
The council also made a motion to designate $77,377 for the Isanti Relief Business Grant Program, which will provide emergency assistance for businesses that have been impacted by COVID-19.
Community Development Director Sheila Sellman explained the grant program will designate funds for businesses in the amount not to exceed $5,000 per eligible business for a total allocation of $77,377. The grants are for businesses and nonprofits within city limits that are locally owned and operated and meet certain criteria established by the city.
The funds may be used for current payroll obligations, expenses for personal protective equipment, lease or mortgage payments, utilities, accounts payable, payment to suppliers and/or critical business expenses that can’t be paid as a direct result of the COVID-19 pandemic.
Applications must be received by Sept. 25 and are on a first-come, first-serve basis. Sellman said after the first round of grant applications are received and funds are allocated, if there are remaining funds, businesses can reapply for another possible grant.