6 things to know about Rochester’s preliminary levy

September 20, 2018

Rochester’s preliminary tax levy was set Monday at $74.7 million, a 9 percent increase over this year’s levy.

Here are a few things to know about the 2019 preliminary levy:

1. It’s not set in stone.

A preliminary levy sets a cap for next year’s final budget. While the dollar amount cannot go up, it can be reduced when tweaking the $289 million proposed budget.

“Obviously, that will provide the guideline of what you can do,” City Administrator Steve Rymer told the Rochester City Council on Monday.

2. The percentage increase is not directly related to property tax increase.

If the proposed levy increase stands, it represents the total the city will collect in property taxes next year.

With an increasing tax base, the increase will be spread across more properties and distributed differently in 2019. The city budget estimates the city’s total market value will increase by 8.5 percent, with a 2.2 percent increase attributed to new construction.

Additionally, differing tax rates for property types will affect what each property owner sees on a tax bill.

3. The final budget is less than three months away.

The Rochester City Council is slated to approve its final budget on Dec. 3, which will determine the final levy.

Public comment opportunities on the proposed budget are being planned as the council continues work to refine its spending plan.

Three public presentations of the budget plan are tentatively set for 8 a.m., noon and 5 p.m. Oct. 10 at the Rochester Public library, and Rymer said staff will be willing to arrange additional events for the public.

Additionally, a mandated truth-in-taxation hearing will be held before the final budget is approved.

4. A 5 percent increase would cover the city’s baseline budget.

With $2.6 million in expected increased salary costs and a $1.55 million increase in health insurance cost, the city administration’s proposed budget calls for a $6.2 million increase to keep the “baseline budget” in place.

“By definition, the ‘baseline’ establishes the resources necessary to maintain the delivery of existing services,” Rymer wrote in his recommended budget report.

5. The capital improvement request is down.

A request for $95 million to support equipment purchases and infrastructure improvements next year is down from the $97.5 million approved for this year.

Of that $95 million sum, $4.6 million is expected to come directly from the property tax levy.

That includes $1 million for resurfacing local streets, $743,000 to expand the city’s public-transit fleet and $275,000 to continue fighting an Emerald Ash Borer infestation in the city.

6. Budget offering new look at numbers.

As they prepare to take a deeper look into some budget items, council members said they appreciate the new budget process, which is working toward providing a two-year look at the operations budget and a six-year look at capital improvements.

“This has been a far superior process than what we’ve seen in recent years,” Council President Randy Staver said of the multi-year approach.

Council Member Michael Wojcik echoed the sentiment. “This is the way we need to do budgeting in the future,” he said.

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