City approves levy and budget for 2023
Published 6:17 pm Tuesday, December 20, 2022
The Austin City Council approved both of its 2023 tax levy and budget during its Monday night meeting.
After its Truth and Taxation meeting on Dec. 7, the City Council unanimously moved the tax levy increase of 4.32% and budget of $39.8 million forward to Monday night’s meeting for final approval.
The tax levy increase will generate just under $8.3 million in revenue for the upcoming year.
The tax levy was dropped by nearly 3 percentage points from an initial increase of 7.05% early in the process.
Loan approval delayed
After urging the council to authorize a $42,216,633 general obligation wastewater revenue note from the Minnesota Public Facilities Authority a few weeks ago, Director of Administrative Services Tom Dankert advised the City Council to turn down the authorization in lieu of a changing market and the possibility of a better rate.
The change in the market allowed Owatonna to get a reduced rate of 1.95% compared to Austin’s 2.638%, which Dankert said was still a really good loan rate. That combined with the City’s own research and advice from Baker Tilly Tax, Advisory and Insurance, prompted Dankert to ask for a pause on authorizing the PFA loan.
By turning down the original rate offered to the City, Dankert was hoping the city would also be able to lock in a rate of around 1.91 to 1.95%, and on Tuesday Dankert said the new rate had been accepted at 1.912%, good for a savings of $3.6 million over the life of the 20-year loan repayment.
At the same time this lower rate takes a $2.2 million Water Infrastructure Grant off the table that Austin was otherwise approved for because of the higher rate, however, the $3.6 million will save outpaces the $2.2 million.
The city now needs to come back to approve the new rate at their Jan. 2 meeting.
“We’re trailblazers here,” Dankert told the council Monday, indicating that those at the PFA had never heard of a city doing what Austin had done.
In other news:
• The City Council voted to push back approval of the portion of the consent agenda considering committee appointments.
• The Council also approved the five year Capital Improvement Plan at $190 million dollars. Projects for 2023 are locked in, but any capital improvements for the next four years could shift depending on importance.