Page Title

August 22nd, 2011

Councilmembers met at 5 p.m. Monday evening, August 22nd. The preliminary 2012 budget presented to them by staff included total revenues and expenditures of $3,575,971. The adopted budget last year, for 2011, was $3,673,227. The tax levy roughly coincides with these figures. The numbers do not include the roughly $1 million in revenues and expenditures budgeted each year for the Victoria Rec Center.

Tables show that the taxable market value of Victoria -- which hovers around $1 billion -- has been decreasing since a high of $1,101,728,100 in 2009; this, despite a growth in the number of taxable households in Victoria -- from 2,610 in 2011 to a projected 2,675 in 2012.

Taxable market value of Victoria in 2012 is projected to be $987,403,400. Property values have been decreasing.

Staff presented two scenarios for councilmembers to consider: Scenario D1 keeps the tax rate constant at 37.4%. Scenario D7 includes dollars for street maintenance.

Said City Administrator Don Uram, "We went back and focused on two different scenarios. We're in pretty good financial shape. We're a small community. There really aren't a lot of places to cut. We are shorthanded in the Public Works Department. At some point, the level of service we provide to residents will be impacted."

"I'm concerned that we're trying to boil the ocean," said Councilmember Tom O'Connor. "We've got an obligation to maintain a level of services. We've got a road structure that we've got to maintain or we're going to regret it.'

Said Councilmember Kim Roden, "What are we willing to sacrifice to do all these things? Over the years we've put $7.7 million into the Field House. We've had our dessert and now we've got to do the salad. Past councils have said we needed it. We've built our leisure building. We better admit what's been done."

"We've got reserves," she said, "but we've also got public needs. What we did the last ten years impacts what we do for the next ten years. Are we going to get real about buying down our debt?" She mentioned the City of Victoria has a debt of $39 million and 7,500 residents.

Later, Administrator Uram eplained, "A key point is that we have $9.9 million in advanced refunding bonds. These are counted as debt until the refunding actually occurs, which is scheduled to occur in December 2012. The city has $9.9 million in escrow to pay off these bonds. Actual total debt is $28.1 million."

That debt is related to the Water Treatment Plant, the Street Reconstruction Projects, the Recreation Center and Diethlem Park Lease, and Tax Increment Financing for downtown improvements.

Councilmember Crowley commented that approximately 70% of taxes collected in Victoria are being paid by those with homes above the median value of $341,000. "I don't want to pay more taxes," he said.

***

After the workshop, during the city council meeting, Administrator Uram said he was looking for a levy number from councilmembers and pointed out, "The only difference between the two budget scenarios is $156,000 for street maintenance. The rest is all strategic."

Council was reminded that no matter where the preliminary levy is set, that number cannot be raised, it can only be decreased in the final levy next December.

Commented Councilmember Crowley, in that regard, "Invariably, things go to the maximum. I don't want that freedom. I'm looking at keeping taxes where they are now and still funding street maintenance. I don't see that scenario."

He continued, "We need to sell some [city-owned] land and solve some problems but that won't happen in six months. Sale of the land is part of getting a Public Works facility. I don't want to fund it by raising taxes ... We've got all the pieces to the puzzle, but I don't think the solution is D1 or D7. We just have to work harder."

"I appreciate your suggestion that we sell something to generate the cash, before we buy something," said Councilmember Tom Strigel.

Councilmember Tom O'Connor said that city taxes would not be increasing under either scenario. "The projection is that the check I write next year will be less than it is this year," he said. "The rate may go up but the value is going down so I won't see an increase in taxes."

Councilmember Crowley pointed out that, as a percentage of the value of a home, property taxes are going up.

"This is a high demand community," said Mayor Thun, "and we must be prepared to meet those services."

Click here to continue Tax Discussion.

Drs. Dungey, Menser & Associates

Victoria and Waconia. 952-443-2816