West St. Paul sets preliminary budget and levy

The charts show the breakdown of the different budget (top) and levy options. Council approved the option one package. The final budget and levy will be set in December.

The West St. Paul City Council approved the proposed 2017 preliminary budget and levy at the Sept. 26 meeting, just in time for the Sept. 30 deadline. 

The proposed property-tax levy needed to be certified by Dakota County no later than Sept. 30. Once approved, the levy cannot increase.

Sherrie Le, assistant city manager, said in 2016 there was a 4.77 percent increase in the property-tax levy, which made that levy be roughly $12.1 million. 

“Our maximum levy was higher than that. What we generally do is approve a maximum possible levy at this time of year, and we continue to work with the council on the budget and try to refine it and get it down to as low as we can get it to get the city’s work accomplished,” Le said. 

The original levy proposal for 2017 was an 8.46 percent increase in city property taxes. This would have put the levy at roughly $13.2 million. Le said this was a higher figure than anyone at City Hall wanted it to be.

Two different plans were presented to the council for next year’s budget and tax levy that were lower than the original proposed plans.

The first revised option brought the levy down to roughly $13.1 million, which would be an 8.05 percent increase from 2016.

“The city is moving up two new police officer positions that are being included in the 2017 budget so that both of them would be filled Jan. 1. The original budget had them being filled in April 1 and July 1,” Le said.

This first option also decreased the amount of money the city has to pay for its portion of health insurance premiums. Le said the city had “a really horrendous” insurance renewal proposal from its medical insurance provider that was almost 24.5 percent higher than last year.

Le said the unexpected spike in insurance premiums was not something the city could afford, so it solicited bids from health insurance companies and did some negotiating. The city received a “much more reasonable bid” for health insurance, but is still negotiating with employee unions on health care benefits. 

Le said the insurance renewal information would be presented at the next council meeting.

The second option increased the tax levy by 7.22 percent, putting it at roughly $13 million. This option would keep the delayed police officer hiring to April 1 and July 1 but take the almost $200,000 in insurance savings.

Joan Carlson, finance director, said household impact of rising property taxes is not usually talked about until staff is ready to discuss a final levy because too many things can still change until that point. 

Le said a large part of the budget is taken up by salaries and benefits for employees, and equipment expenses.

The largest areas of increase in the proposed 2017 budget are the health insurance premiums, salary and benefits, and the fire contract with South Metro Fire. 

The original 2017 proposed general fund budget was roughly $13.7 million, an increase of approximately $914,000 from 2016’s budget.

The council was given two options regarding the proposed 2017 city budget that corresponded with the levy options. Option one brings the general fund budget down to roughly $13.6 million, while the second option brings it down to roughly $13.5 million.

Le said it was up to the council to approve the maximum levy and preliminary budget, but work would continue to try to reduce the budget. 

Mayor Dave Meisinger said he could guarantee to everyone listening to the meeting discussions that the final levy increase would not be the range of 8, 7, 6 or even 5 percent. 

“Last year it was only 4.77. We’re certainly not going to double that this year,” Meisinger said. 

Council member Dave Napier said he agreed that while the preliminary levy was set at the highest possible rate, he is committed to bringing it down to a more manageable number.

Napier said he thought the proposed option one was preferable because allowed the police officers to be “hired sooner rather than later.” He made a motion to approve option one, which was seconded.

Council member Jenny Halverson said she supported bringing both officers on at the same time. 

Police chief Bud Shaver said the reason for the staggering of the hiring was to reduce the overall salary cost of two new officers in year one. He said the staggered start would save roughly three-quarters of an officer’s annual salary. 

Council member Ed Iago said he couldn’t support the staggered delay because public safety is something the city needs to address now. 

“To delay it for this minor amount and not have the benefit of trained officers until the tail end of the year to me just doesn’t make sense,” Iago said.

Option one, the proposed levy of roughly $13.1 million and general fund budget of roughly $13.6 million, was approved 5-1, with Iago dissenting.

The city’s truth-in-taxation public hearing and final budget will be  approved at the council’s Dec. 12 meeting.

Hannah Burlingame can be reached at 651-748-7824 or hburlingame@lillienews.com.

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