Montevideo residents can expect the 2011 city tax levy to increase no more than 5 percent based upon action taken by the City Council Sept. 7. Council will conduct a public comment meeting to discuss the budget Dec. 6 at 7 p.m.


Montevideo residents can expect the 2011 city tax levy to increase no more than 5 percent based upon action taken by the City Council Sept. 7. Council will conduct a public comment meeting to discuss the budget Dec. 6 at 7 p.m.

The final budget will be adopted at the regular council meeting on Dec. 20.

Both the levy and preliminary budget were unanimously approved at the first council meeting in September as required by the city charter. State legislation requires the adoption of a preliminary levy and budget by Sept. 15.

Council also approved a tax levy for the Economic Development Authority. The tax is based on a maximum of .01813 percent of the taxable market value of the city, and will be $39,695 in 2011.

The preliminary 2011 total tax levy is $1,726,000, which is a 5 percent increase from this year. The general and special operating funds reflect a 4 1/2 percent increase of $51,161, and the debt service levy reflects a 6 percent increase to $552,500.

During a brief discussion, councilman Marv Garbe wondered whether it might not be wise to build in an additional 1 percent “cushion” in case the state makes additional cuts to local government aid (LGA) next year. The additional 1 percent would add $16,000 revenue.

City manager Steve Jones stated there were “strategic pros and cons” to the suggestion, but he suggested the additional revenue was not worth it. “I feel comfortable with a 5 percent increase,” he said.

The general fund budget projects revenues of $3,725,615 and expenditures of $3,724,400. The general fund is one of 40 funds in the budget, but is the “working fund for the city,” according to Jan Flaherty, city finance director.

Expenditures in the preliminary budget are projected to be $10,879,365 vs. projected revenues of $11,177,105. The budget includes a tax revenue increase of $82,256.

In developing the preliminary budget, city staff incorporated recommendations from a budget work session that included department heads conducted in August.

According to Flaherty, there are “not a lot of changes from 2010.” Line items were kept to zero percent increases.

Pay increases are limited to step increases, and reflect a 12 percent increase in benefit costs. Police department expenditures are down, as well, because of one less staff member and the loss of the school liaison position.

The public utilities fund is cash-flowing and no rate increases are needed, Flaherty noted.

The monthly charge for streetlights will be increased in 2011 to $3.05 for residences and $12.46 for businesses.

Flaherty told council there was the possibility city and county governments could lose additional state aid, but it was hard to say how much. Because LGA is about 50 percent of city revenues in the general fund, further cuts could create problems.

“We’re one of those cities that depends heavily on LGA,” said Flaherty.

The budget includes $350,000 in the capital equipment and facilities fund in case additional LGA is lost, Flaherty noted. If more LGA is cut, the city would cut back on capital improvements.

In other business, the council:

• Presented police officer Nick Gunderson with a life saving award for his role in responding to an emergency call. He performed CPR and used a portable defibrillator on an individual who was not breathing. The victim survived and is recovering. It is Gunderson’s second award.

• Tabled awarding the 2010 sidewalk improvements because the bid was twice what was expected.

• Voted unanimously to discontinue the city’s annual $1,250 contribution to Prairie Waters Regional Tourism.

• Adopted a resolution approving a grant agreement with the state of Minnesota for airport runway rehabilitation design. The state acts as grant administrator on the project, but does not contribute financially.

• Introduced an ordinance naming the frontage road between 24th and 28th streets Washington Avenue.

• Adopted an ordinance that allows council to declare a street substandard and to restrict traffic to 1 1/2 tons or less in weight. The only street affected at this time is Coleman Avenue.

• Went into executive session to discuss union negotiation with AFSCME.