Investment in street infrastructure and the desire to drop more coins in the reserve bank led Minnetrista city council to adopt a 2020 levy increase just shy of that submitted to the county in September.

Both the levy increase of 5.66 percent over the current year and a final general fund budget of $5.13 million were approved by 4-1 margins following the council’s Truth in Taxation hearing Dec. 2. Council member Shannon Bruce provided the sole dissent on both items.

Next year’s increase will bring the net levy to $4.8 million, about $258,000 more than in 2019. 

That increase will help fund an expanded budget that was heavily impacted by the city’s continued investment in its street infrastructure and the desire to use less and less from its reserves in covering the million dollar gap in total expenditures and revenue.

Next year’s levy increase is the first increase to the general fund in eight years. The city had been able to ride a wave of steadily appreciating home values and has enjoyed a generously expanding tax base as large development projects came to completion in recent years. Reports from the Hennepin County Assessor’s Office show Minnetrista added 100 new homes in the last year alone, and the city has experienced an average growth of 2.5 percent in recent years.

But Minnetrista, even as its median home value is nearly half a million dollars, also still holds miles of unpaved roads, a factor that played a strong hand in the city’s adoption of a bigger budget for  next year.

The city is levying to add an additional $125,000 to the tar bucket for 2020 to cover everything from mill and overlay to full reclamation projects. That additional street money is part of a graduated plan sanctioned several years ago that calls for more and more money to be allocated to city streets every year. The city budgeted $475,000 for roads in 2019; that number climbs to $600,000 in 2020.

The final levy for Minnetrista is just shy of the preliminary 5.87 percent increase council members had submitted to the county back in September.

“It’s always hard to raise taxes,” said Minnetrista Mayor Lisa Whalen during the council’s Dec. 2 session. “However, the council has looked at how will this impact our wallets?” 

“What are our needs and what are our obligations? What are our priorities and our goals and are we able to achieve those with this budget?” Whalen continued. “Is the budget reasonable, is the levy increase reasonable and what’s in the best interest of the community as a whole? These are all things we look at when we’re making a decision of this nature.”

The status of the city’s reserve funds also played into the council’s adoption of a higher levy for next year. Minnetrista has shown a yearly downward trend in its reserve balance, from 69 percent of expenditures in 2015 to 44 percent for the current year, according to numbers pulled by Minnetrista finance director Brian Grimm and presented to the council Sept. 3. The city has a policy of keeping reserves above 40 percent.

Council member Shannon Bruce, who has opposed the higher levy option throughout the city’s budgeting process, was the lone hold-out in her votes against both the levy and the budget.

Bruce made known on her Minnetrista Governance Blog Dec. 6 that she saw the additional money directed to the reserve fund as unnecessarily cautious when the city has reserves at 44 percent of general fund expenditures.

Bruce also said she disagreed with the city’s budgeting process, writing that all budgeted items should have had specific justification for any increases.

“The budgeting process in Minnetrista needs to start out assuming every line-item increase, which isn’t just inflationary, needs justification,” wrote Bruce, indicating, too, that she advocates creating a committee of two council members for the purpose of dissecting the annual budgets. “How else can the council responsibly vote to support a tax levy if it doesn’t know what the justifications are behind all the increases?”

Council members decided to forgo adoption of a formal financial management plan designed to act as a roadmap for the next few years. Multiple council members said that there is too much variability to nail down specifics when the city continues to expand year by year.

“Anybody’s budget is simply that - it’s kind of your best projection,” said council member John Tschumperlin, who joined the others is accepting the plan as a tool and nothing more.

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