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Fall 2014 City Hall - 3800 Laverne Avenue North - Lake Elmo, Minnesota 55042 (651) 747-3900 At its September 2nd, 2014 meeting, the Lake Elmo City Council voted 4-0 to reduce the property tax levy which may result in a lower tax rate for Lake Elmo residents for 2015. The 2015 tax levy will be approximately $3,137,000 or approximately $25,600 lower than in 2014. “In light of the recent passage of the school referendum and the upcom- ing growth the City faces, the Council thought it was important to keep the lo- cal portion of property taxes as low as possible,” said Council Member Wally Nelson, who is also Chairman of the Finance Committee. A base assumption to the 2015 bud- geting process was that if at all pos- sible there was to be no municipality tax increase. The debt service compo- nent of the levy was scheduled to in- crease by approximately $250,000 in 2015. Due to the projected increase in revenue as a result of new construc- tion projects, this scheduled debt ser- vice increase was able to be absorbed within the General Fund budget rather than being passed along to the tax- payer through a tax levy increase. The Council voted to lower the levy by keeping the ad valorem tax levy the same as 2014, maintain the debt ser- vice levy at the 2014 level and drop- ping the library portion of the levy by $25,600. (Note: A recent survey of Minnesota Cities note an average tax levy increase of 3.68%.) 2015 is also the first time that the City has used a performance based pro- cess as a means of fully understanding the cost of local government. Depart- ment heads tore down their budgets to “zero” and built them back up using performance metrics, trend analysis, and growth forecasting. Personnel costs were held in the 40% range of the overall budget as opposed to the Minnesota average of 55-60%. The Washington County Sheriff’s contract increased by $12,000 but still remains at $61 / per capita – one of the lowest in the east metro. “With the establishment of our new Fi- nance Committee, which has a make- up of both elected officials and ap- pointed experts in accounting, we took this opportunity to review our budget with a fine tooth comb. In addition, we have built comprehensive financial models to understand the impact each new component of growth has on our bottom line,” said Nelson. The 2015 General Fund budget also contains a new permanent line item for street maintenance (seal coating, crack filling) that insures proper care of the city’s road infrastructure will take place each year. “Traditionally, street maintenance is one of the areas that municipalities cut when trying to balance their budget. This Council has made a commitment to a structured street maintenance program that will extend the life of our infrastructure. By adding the perma- nent line item we hope to guaranty that those front door issues that are impor- tant to our residents are always taking care of,” said Mayor Mike Pearson. The overall 2015 General Fund op- erating budget will increase from $3,303,000 to $3,798,000 with all of the increased revenue and expense being paid for by new development via permit fees, escrow agreements, and developer agreements. “This Council has said all along that “growth will pay for growth” and not the current taxpayers of Lake Elmo. This budget is a practical application of that policy,” said Nelson. The City of Lake Elmo will host their annual Truth in Taxation Budget Hear- ing on December 2, 2014 at 7 p.m. City Council Cuts Local Property Tax Levy City Hall - 3800 Laverne Avenue North - Lake Elmo, Minnesota 55042 (651) 747-3900