The Dundas City Council approved a preliminary 7 percent tax levy increase on Monday night.
The increase, however, is not expected to increase property taxes on a home that did not increase in value because the tax rate — the percentage taxpayers are taxed at — is not projected to increase.
Dundas Administrator Janelle Teppen said the property taxes for most Dundas residents pay will likely decrease. She said she is pleased with the proposed tax levy amount. Under the increase, the tax levy will rise from $1.02 million to $1.09 million.
The increase is primarily due to City Hall construction costs coming in approximately $130,000 more than projected. Construction on the new, 4,900-square-foot building is now projected to cost $2.26 million. Much of the increase is attributed to the retaining wall and infrastructure needed to serve the City Hall and parking lot.
The city is now expected to bond for $2.2 million for the project, an increase from previously estimated $1.8 million.
Retired administrator John McCarthy, who is assisting Dundas in the budget process, said if the city would have a better idea of how to manage its surplus funds if the levy is increased 7 percent.
Because of the increased City Hall project cost, street lighting and sidewalk work is expected to be delayed one year. The berm/trail and sidewalk project at Memorial Park, expected to take place before the city hosts the 2022 Class C & B baseball tournament, could be delayed from 2020 until 2021.
The tax levy cannot increase before it is set in December. It can stay the same or decrease.
In other action, the council:
• Proclaimed Sept. 17-23 Constitution Week.
• Accepted bids and awarded a more than $374,000 contract with Swanke Ims Contracting for City Hall site and utility improvements.