CENTERVILLE — As it does every year at this time, the Centerville City Council unanimously (4-0, as Councilwoman Michelle Lakso was absent) adopted the preliminary budget and tax levies for 2020 in the amount of $2.7 million.
The 2020 total levy of $2.7 million is an increase of $60,620 over 2019, or an increase of 2.24%, Finance Director Bruce DeJong said at the Sept. 25 meeting. Each percentage point increase represents roughly $27,000, he added.
The $2.7 million levy is made up of the general fund levy of $2.3 million and the debt service levy of $457,263.
The 2020 general fund levy of $2.3 million increased by $107,893 over 2019. The levy is the balanced budget with revenues equal to expenditures. The other part of the levy, the debt service levy of $457,263, decreased by $47,273 from the previous year. The debt service levy is the payment due on bonds the city has issued. The property tax contributes to paying off that debt.
The city also has additional bond funds in the amount of $263,756 for which it will not be levying, DeJong said. That amount won't be added to the levy because the city has sufficient funds available to make the payment.
“This is based on having a balanced budget, and we are not spending down our budget,” City Administrator/Engineer Mark Statz said. “We see the results of council pushing through hard times and we see those debts coming off the books.”
The levy increase in Centerville for 2020 won't necessarily translate into an increase on individual property tax bills. Individual property taxes depend greatly on the appraised home value—or a home's percentage of the total pie of taxable property value in Centerville, DeJong said.
“Because there has been some growth in the tax base, there will be a slightly smaller tax increase on the average property in the city,” DeJong said. Not all properties change value at the same rate, so there will be people with tax increases and some with tax decreases, he added. The property tax system is designed to allocate taxes based on relative value changes, so very few people will have an exact 2.4% increase in their proposed tax bill come November.
The levy of $2.7 million cannot be increased by the City Council prior to formal adoption of the city budget this December, but it can still be lowered. “We have a commitment to meet again and discuss ways to try and reduce this amount further,” DeJong said.
“We've been working on the budget for four to five months with a lot of work sessions and staff effort,” Mayor Jeff Paar said. “And we will continue to work right up until December to try and get it even lower.” He said the city's goal was to keep things flat and to be fiscally responsible. He noted that DeJong had restructured the city's bonds to lower its debt for infrastructure.
The city is fiscally sound, has reserves and is well within the financial parameters outlined by the state and its auditors, Paar said.
The 2020 preliminary budget and proposed tax levy will be certified to the Anoka County auditor so the county can prepare Truth in Taxation property tax notices, which are mailed in November. The county auditor will take property assessment values and apply total taxes against those values. Tax estimates then will be sent to everyone in town during the last two weeks in November. The property tax statement property owners will receive from the county will show their individual property taxes based on what the city, county, school district and other districts have levied.
The date for the Truth in Taxation public hearing has been set for 6:30 p.m. Dec. 11 at City Hall. Anyone with comments, concerns or questions about the property tax statements they receive in November has an opportunity to ask questions and seek clarification at the hearing.