A $10.82 million preliminary 2021 levy OK’d by the Northfield City Council would increase property taxes by about $75 per year on a residential property valued at a $250,000.
The council, which passed the preliminary levy 5-2, expressed a desire to make cuts before approving the final figure in December, wanting to minimize the economic turmoil wrought by COVID-19. Councilors Brad Ness and David DeLong voted against the measure.
The preliminary levy, 5.7% higher than in 2020, includes a cost-of-living increase for city employees and higher medical insurance costs. The preliminary increase also comes after the city added two new positions — a wastewater planner scheduler and program coordinator, which was partially offset by a $50,000 grant from the McKnight Foundation. Like other Minnesota cities, Northfield is grappling with the possibility that the state, faced with a substantial projected deficit following the onset of COVID-19, could decide to cut local government aid.
The city is considering using federal Coronavirus Aid, Relief and Economic Security Act funding for unexpected expenses or as an additional revenue source to help offset property taxes for next year.
In considering a smaller increase, Councilor Jessica Peterson White said that doing so would eventually result in a larger tax increase to offset the revenue loss for next year. In supporting the 5.7% figure, Peterson White, in an opinion shared by fellow councilors Clarice Grenier Grabau and Erica Zweifel, said the staff-recommended hike would allow city residents to receive most of the services they need and expect.
However, Ness said he every resident he’s spoken with told him that the council shouldn’t increase the levy any more than 3.7%. Although he supports a 3.7% increase, Ness admitted feeling “torn” over the 5.7% figure, and added that he hopes councilors find ways to make cuts before December to ensure a minimal tax increase.
DeLong challenged Peterson White’s concern over larger tax hikes in the future if the council passed an increase of less than 5.7%. Discussing ways to reduce expenses, he spoke of the financial cost of the roundabout at the intersection of Minnesota Highway 246 and Jefferson Parkway, and the installation of bump-outs and bike lanes that the council has approved.
“The City Council just seems to have a bottomless checkbook, and I’m not a pickpocket,” he said.
Despite supporting the 5.7% figure, Mayor Rhonda Pownell also said her preference was for 3.7% while strategically using CARES dollars for one-time expenditures and called for the council to find ways to reduce the tax levy using the federal funds.
Councilors set the preliminary 2021 general fund budget at $14.38 million, the initial EDA budget at $272,985 and the HRA amount at $278,204.
The preliminary increase comes as median home values continue to rise in Dakota and Rice counties. In 2020, despite the pandemic, Rice County median home values increased 5.7%. In Dakota County, the median increase was even higher at 8.5%.
Oct. 13 and Nov. 10 budget work sessions are planned before the final 2021 levy and budget is approved by the council Dec. 1.