City of Red Wing approves 2013 budget

The Red Wing City Council has mapped out a plan to tackle a backlog of capital projects — such as repairing and maintaining roads and bridges — and on Monday night passed a 2013 budget and tax levy to start down that path.

The council voted 6-0 to approve a 2013 property tax levy of $14,150,314.

“Most of the general fund increase is capital-related,” Finance Director Marshall Hallock said.

In increasing the levy, the city is hoping to take advantage of extra tax funds available from Xcel Energy.

“Our tax capacity is increasing largely due to investments at the Prairie Island Nuclear Generating Plant,” Hallock said, noting improvements there are expected to continue for at least five years.

If everything else remained the same, Xcel would pay higher property taxes but other taxpayers would see their bills go down. The city wouldn’t garner any extra money — Xcel would just be paying more toward the total and others less.

By increasing the levy amount, the city hopes to take advantage of those extra funds and address infrastructure issues.

“Our goal is to keep operations as flat as possible and use that additional tax capacity for capital purposes,” Council President Ralph Rauterkus said.

“We’re trying to emphasize renewal and replacement without significantly impacting the taxpayer,” Hallock added.

He said if a house stayed at the same value, the change would feel like about a 1.26 percent increase in the tax rate.

Last year’s levy was set at $13,017,421. During the city’s truth-in-taxation meeting Monday night before the council adopted the 2013 budget, Hallock broke down what was involved in the increase.

• Debt service: $432,351

• Increase in grant matching fund requirements: $25,950

• Economic development tax abatement: $24,386

• Elimination of fund balance draw (not taking funds from the city’s “savings account”): $150,000

• State utility aid reduction: $184,101

• Strategic initiatives (based off the strategic plan): $165,500

• Other: $150,605

Total difference: $1,132,893

Changes negotiated on the operations side throughout the budgeting process, including during last week’s City Council meeting, were incorporated into the budget approved Monday, Council Administrator Kay Kuhlmann said. That included trimming the library book budget and funds for nuclear waste storage issues and halving the budget for a police officer, starting the position July 1.

“Not everybody got everything they wanted,” Council member Mike Schultz said. “This is all about compromise.”

Top priorities in the capital improvement plan include road construction and repairs, projects along Levee Road and to cross Highway 63 and a ladder truck for the fire department.

The budget is always evolving, staff noted. For example, the city is aiming to secure state bonding funds for key projects including work at the Sheldon Theatre, the west Red Wing fire station and improvements along the riverfront.

The special council meeting Monday, which lasted about 45 minutes, followed the truth-in-taxation meeting. A handful of citizens attended, and one asked about paying for capital projects at the incinerator.

The council also voted 6-0 Monday to introduce an ordinance outlining fees for 2013. It includes a number of changes including increased fees for cemeteries, Dumpsters, waste and stormwater and sewer charges and lower admission rates for he Red Wing Aquatic Center. The ordinance will need final approval at the council’s Dec. 10 meeting.

Council members approved the Port Authority’s $307,409 levy Monday as well, though tabled the detailed budget until the Dec. 10 meeting so the entity can hash out details.

Later in the year, the council will have to determine how much and how to spend borrowed funds.

Council member Peggy Rehder was absent from Monday’s meeting.

A closer look

Here is a breakdown of how the funds come in and are spent in the city’s general fund.

2013 proposed general fund revenues:

• Taxes: 72 percent

• Intergovernmental (ex. local government aid): 10.9 percent

• Bond proceeds: 8.4 percent

• Transfers: 2.7 percent

• Interest, rent, donations: 2.2 percent

• Services: 2.1 percent

• Franchise fees: 0.9 percent

• Fines: 0.5 percent

• Licenses and permits: 0.3 percent

2013 proposed general fund expenditures:

• Safety: 30.2 percent

• Public works: 18.3 percent

• General transfers: 17.1 percent

• Culture and recreation: 15 percent

• Government (ex. City Council expenses): 12.2 percent

• Special activities: 7.2 percent

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