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Farmington tax levy slated to increase 2.87 percent

Farmington City Administrator David McKnight provided an update to Farmington City Council on the 2019 proposed general fund budget and preliminary tax levy at the Tuesday, Sept. 4, regular council meeting.

Council members voted to adopt the proposed 2019 general fund budget and preliminary tax levy of $10,795,765 — a 2.87 percent increase. The council is required to set the 2019 preliminary tax levy by Sept. 30. That information is forwarded to Dakota County and Truth-in-Taxation statements are sent out to residents in November.

The city may decide to lower the 2019 proposed tax levy when it is adopted in December, but the preliminary levy cannot be increased.

Factors impacting levy

The city council decided to use $240,000 from the city's general fund balance to reduce the levy increase for 2019.

"These dollars are available because the general fund was above the 40 percent fund balance reserve goal at the end of 2017, and the actual fund balance percentage at the end of 2017 was 44.9 percent," McKnight explained.

Another factor is assumed cost increases in human resources and benefit costs related to four union contracts that will expire Dec. 31, 2018, along with the non-union employee group.

The debt levy represents the amount of tax levy needed to meet the city's debt repayment obligations. The 2019 debt levy is 0.03 percent less than the 2018 debt levy.

The 2019 levy includes the collection of $191,000 for the Westview Acres reconstruction project. The amount collected in 2019 will be used to make the payment due in February 2020.

New city positions

In the proposed budget, there will be funding allowances for changes and additions to city staff.

Two building maintenance positions will replace the current contracted cleaning service. One will be a part-time position to take over city hall cleaning and maintenance at city hall, the Rambling River Center, the police and fire stations and city maintenance facility.

A new position for a community development specialist is proposed to be added to the administrative staff who will work on code enforcement among other duties.

A full-time assistant fire chief and inspector is proposed to be added to the 2019 city budget.

Two proposed administrative support positions include a full-time city hall and a half-time Rambling River Center position.

Fiscal disparities

Fiscal disparities is a metro-wide program cities use to balance development of commercial and industrial growth throughout the region.

"Our financial plan takes the approach of reducing this amount 1 percent each year as a precautionary approach," McKnight said. "The actual amount for 2019 is $2,225,003 which is a 1.74 percent increase over 2018."

In discussion with city staff after they received actual numbers for fiscal disparities last week, the additional $61,570 was placed into two different budgets, McKnight said.

The city hall budget received $10,000 for possible custodial equipment and supplies purchased. The remaining $51,570 was placed in the transfers' budget, trail and sidewalk maintenance line items.

Tax levy impact

The tax impact on the proposed 2019 tax levy for the city portion of the average residential property with property tax is expected to increase by $7.

In 2019, the estimated market value on the average residential home in Farmington increased to $254,492 — an increase of 8.31 percent over 2018.

The public input meeting for the final adoption of the 2019 city budget and tax levy is slated for 7 p.m. Monday, Dec. 3 at Farmington City Hall.