The Austin City Council passed a resolution establishing a proposed tax levy and budget for taxes payable in 2018 during its regular meeting on Monday. The vote was 6 to 1, with Councilman David Hagen (Second Ward) casting the dissenting vote.

The proposed city budget for 2019 is $35,145,175, broken down as follows:

• General Fund – $17,794,622

• Recreation Programs Fund – $88,503

• Library Fund – $1,211,032

• Fire PERA – $4,000

• Tax Increment Debt Service Fund – $248,833

• Capital Improvements Revolving Fund – $3,611,000

• Sewer User Fund – $5,702,808

• Water Transfer Station Fund – $54,424

• Port Authority Fund – $154,032

• Storm Sewer Maintenance – $813,821

• Central Garage Fund – $2,217,560

• MIS Replacement Fund – $239,897

• Fire Fleet Replacement Fund – $180,000

• Risk Management Fund – $2,824,643

The proposed tax levy for 2019 is $6,873,000, which is a $932,000, or 15.7 percent increase from 2018. Reasons for the increase include $500,000 for the implementation of the compensation and classification study, a $200,000 housing initiative and additional funds for 2019 negotiated cost of living increases for city employees.

Under Minnesota law, the council is required to pass a proposed tax levy and submit it to the county and state no later than Sept. 30.

After that, the council may decrease the tax levy, but may not increase it.

The tax levy is derived from property taxes, which are based on the valuation and classification of the property using standards set by the state legislature. A 15.7 percent increase would mean the following increases for 2019:

• $101,400 home valuation = $60 increase

• $124,600 home valuation = $80 increase

• $187,500 home valuation = $136 increase

• $227,000 home valuation = $171 increase

• $281,500 commercial valuation = $396 increase

• $347,300 commercial valuation = $503 increase

• $997,900 commercial valuation = $1,558 increase

While some, such as Austin Area Chamber of Commerce Director Sandy Forstner, have been critical of the rate at which the tax levy has increased over the years, City Administrator Craig Clark previously pointed out that Austin still ranks among the lowest taxed cities in the state. He also said the compensation and classification study has been long overdue and will help in keeping the city a competitive employer.

As Councilman Jeff Austin (First Ward) said before Monday’s vote, “The majority of our increase is going to people cost.”

Although the increase has angered some, only one Austin resident, Leonard Germer, addressed the council about it during Monday’s meeting.

“Please think about the people that can’t afford this and try to help them out in some way,” he said, arguing that retired people, disabled retired veterans and people with low income are struggling to afford the increase.

Mayor Tom Stiehm acknowledged that the increase in the tax levy is a substantial one.

“A lot of years we’ve said this doesn’t have that big of an impact on people, but this really does have an impact and people need to know the council is aware of that,” he said. “People need to know we thought long and hard about this before we did it and these monies are going to be spent very wisely.”

“Every council member I’ve talked to said we really have to slam the brakes on it next year,” he added.

Administrative Services Director Tom Dankert also noted that city department heads made efforts to reduce their capital requests, while Councilwoman Laura Helle said that city leaders and department heads have worked hard to seek grant money for various expenses.

The vote also included setting the time and date for the Truth in Taxation hearing for 6 p.m. on Tuesday, Dec. 4. The Truth in Taxation hearing is a public meeting that outlines the specifics of the budget and tax levy.

‘Special Vehicle’ ordinance vote moved to next meeting

The council’s Monday evening agenda originally included the preparation, adoption and publication of a “special vehicle” ordinance from the Austin Police Department that would regulate the operations of utility task vehicles (UTVs), all-terrain vehicles (ATVs), motorized golf carts and mini-trucks.

The vote, however, was delayed until the next meeting on Oct. 1 due to the addition of new language regarding equipment on the vehicles.

“Currently, the ordinance does say the vehicles…  must meet the state (Statute) 169 requirements…,” said Austin Police Capt. David McKichan. “Vehicle equipment is labeled under that… The way the proposed ordinance is written, it says that 169 will apply to these vehicles unless it reasonably cannot. There is some indication that some of these lower end vehicles come from the factory without some of this equipment installed and as such may need a couple of kits installed to make headlights, taillights and turn signals happen. We do think it would be in our best interest, rather than to rely on that reasonableness factor and not get into a legal argument over what kind of equipment they would have, is to amend the current section eight of the proposed ordinance, which only says they have to have rearview mirrors, and look at replacing that with required equipment on UTVS to include the two head lamps, two tail lamps, and front and rear signal lamps. We would still have the rearview mirror provision in there, a windshield and, if no windshield, a person shall not operate it without wearing eye protection, and a seatbelt for the front and rear passenger.”

McKichan said he felt these factors should be spelled out in the ordinance as they apply to operating vehicles on the street.

Dankert said that the proposed ordinance is required to be published 10 days prior to the hearing and therefore could not be passed at the Monday meeting since the council was adding new language.