After lengthy discussion and several changes, the Little Falls City Council approved a preliminary levy increase of 8.47%, setting the 2021 preliminary levy at about $4.27 million, up from a final 2020 levy of $3.9 million.
“We set the preliminary levy high in order to accommodate for any impacts that we have between now and December,” said City Administrator Jon Radermacher. “I think this is a pretty great example of a year where something really dramatic has happened and we don’t want to put ourselves into a position where we’ll be struggling to come up with revenue because we put ourselves in an early detriment by forcing our levy to be lower than ultimately what we would’ve wanted it to be.”
The approved preliminary levy cannot be increased, but can be decreased before final approval. In 2020, the levy was reduced by more than 6% from a preliminary levy of 8.43% to a final levy of 2.13%.
The Council set the 2021 preliminary tax rate at 71.36%, a 4.26% increase from the 2020 final tax rate of 67.10%. The 2020 final tax rate reduced by nearly 5%, so even though the levy increased, the rate decrease meant some residents would see no increase or even a reduction in property taxes.
The Council approved a proposed budget of $13.4 million, up from $12.7 million in 2020.
The 8.47% preliminary levy increase was approved after starting with a possible near 22% levy increase. The levy was reduced by removing during the council meeting by eliminating $200,000 in costs related to the bandshell and splash pad, $50,000 in costs related to the Pine Grove Zoo and $278,750 in Local Government Aid dollars.
The city has the possibility of decreasing the levy even further by employing other reduction options, including various maintenance, street and engineering projects and funding, as well as fire relief aid.
If all options were utilized, the final tax rate could be 55.22%, an 11.88% decrease from the 2020 tax rate. The levy itself would decrease as well, but will vary based on the Council’s decisions.
“We clearly have things that we could drop and we could get back to a levy that is 0% increase,” Radermacher said.
The Council set the annual truth in taxation meeting for Monday, Dec. 7, at 7:30 p.m. via Zoom call.