Red Wing City Council unanimously approved a preliminary tax levy of $14,738,314 for next year on Monday night.
The city is required to set a preliminary levy amount in September, but this likely will not be the actual 2014 levy, council members noted.
The final amount cannot be higher than the number set Monday, but it can be lower. And council members hope it will be.
"I think everyone is going to make every effort to get it to be lower than it is tonight," Council President Lisa Bayley said.
The 2013 levy was $14,150,314.
The proposed 2014 levy would feel like about a 3.9 percent increase over 2013's property tax rate, Finance Director Marshall Hallock said.
Bayley reminded council members that the city set a goal to cap that increase at 2.5 percent.
"We're going to have some work to do between now and when the budget is set to get it down to that rate," she said.
The 2014 preliminary budget also was approved Monday, but much of that will change as well.
"We've had discussions already but I think quite a few of these numbers are still pretty rough," Bayley said.
Much of the increase planned for next year is due to revenue changes, not new programs or spending, Hallock said. The city will see a $380,951 reduction in state funding in not receiving what is called utility valuation transition aid.
Another factor is funding capital projects.
"The increase in spending is very carefully planned," Bayley said, noting the city wants to catch up on a backlog of infrastructure work in the coming years by utilizing increased tax capacity at the Prairie Island nuclear plant due to improvements planned there.
The city's next budget workshop is planned for 6 p.m. Oct. 7 at the Red Wing library.
The truth-in-taxation meeting to discuss the levy and budget will be 7 p.m. Dec. 2 at City Hall. The council plans to vote immediately after the hearing.
The City Council also approved preliminary budgets and levies for the Port Authority and Housing and Redevelopment Authority.
The port's preliminary levy is the same as the prior three years at $307,409.
Port Authority Director Randy Olson said the amount is "very preliminary" and "based on a status quo levy amount."
There are discussions about the port's finances and potential changes that could impact both revenues and expenses for the organization, he said.
The port budget also was approved by the council.
Neither had gone before the Port Authority Board when the council voted, but members took action due to time constraints.
"I'm not really thrilled on having to vote on the Port Authority's levy and budget before they have," Council member Dean Hove said.
"The sequencing doesn't sit well with me," Council member Mike Schultz agreed. "I don't want to see this happen again."
The Port Authority Board planned to vote on the issues at its meeting Tuesday evening.
The HRA's budget and levy also were approved. Its preliminary levy amount did not increase from last year and was set at $262,640.