Mound discusses 2018 levy, budget

by Nicole Brodzik
[email protected]

At their August 22 meeting, the Mound City Council discussed the city’s 2018 budget and levy.

Finance Director Catherine Pausche presented the updates to the council. She explained that because the council was only approving a preliminary budget, the levy number could change down the road, but could not go any higher than the figure they set that evening.

Pausche said that staff recommended a 2.5 percent increase in the general fund levy and a two percent increase in the overall levy over last year’s figures.
She explained that because the city spent down reserves and tried to lower the cost of city-wide taxes during the recession in 2008 and 2009, that while the number may be going up, it’s partly because of work being done that was put off to keep those taxes down.

One of the bigger jumps in this year’s city budget was for capital expenditures.

“We have capital expenditures going up,” Pausche said. “This is always a volatile line item. For this year, we have to Ford F-550s for the streets. Those tend to be our larger expenditures.”

A Kubota tractor with attachments, a pin bit hammer attachment for the city’s Bobcat and roof replacements on city buildings were also line items as a part of the capital expenditure budget.

Other items that played a roll in the increase of the city’s expenses were an increase in pay for police services, as a part of the contract Mound signed with Orono police five years ago.

“If you recall when we contracted for police services, we saved a projected $200,000 plus a year,” Pausche said. “We signed a 10-year agreement that was limited, We’re beginning the last five years of the contract.”

Pausche explained that those services are paid for as a part of property taxes, and not as a fee by residents.

“Taxes based on property values do not necessarily reflect any direct relationship to the benefits of government goods and services received. Somebody in that million dollar house is paying a lot more for police and fire and streets than in a $300,000 house. It’s a tough one.”

Because Mound is made up of mostly residential neighborhoods, Pausche said that the majority of the taxable parcels in the community are off-lake homes, coming in 75 percent of the taxable parcels in Mound. While lakeshore home parcels make up only 20 percent of Mound’s tax base, they pay for around 43 percent of the total tax revenue based on their higher property values.

Several residents voiced concerns about the rising prices of property taxes and utilities in Mound, which Mound Mayor Mark Wegscheid acknowledged.

“I think this is kind of an exciting time in a way because we’ve been able to start looking ten years out,” Wegscheid said. “Before, we’ve been weathering the storm. We’ve committed early on to all these streets, all these projects, knowing full well we’d be looking at these numbers. We’re kind of seeing the light at the end of the tunnel and we have a lot of opportunity as we go forward.”

Councillmember Kelli Gillespie echoes that sentiment, saying that going forward, the city is more prepared to handle bigger projects and pace out the funding to make it easier on citizens.

“I think since my time on the council, one of the things I noticed are some of these five-, ten-year,” Councilmember Kelli Gillespie said. “Before, we were dealing with it year to year, as it hits you. It’s been a really strong push by the council. We’ve got to deal with what’s in front of us, but we really have to push out and stabilize so we can hopefully mitigate some of these issues. So I would say it’s a really credit to Catherine (Pausche) and the staff for doing this. We’ve had some bumps in the road, but they’ve done a great job with what they had to work with.”

The council went on to unanimously approve the preliminary budget for 2018 at a value of $5,614,463 with a preliminary levy not to exceed $218,404. The next budget-related meeting with be on Oct. 17 when there will be a budget workshop meeting for the council. Then, on Dec. 12, the council will hold another hearing before voting on a final budget for 2018. “If you have any thoughts in the meantime, email them, give them to staff, so we can evaluate those at those meetings,” Wegscheid said to those in attendance. “Like Catherine had said, the cap is set tonight, It can’t go higher, but it can certainly go lower if we can get it to.”

The next Mound City Council meeting is Sept. 12 at 7 p.m.