At their Sept. 24 special meeting, the Menahga City Council set its preliminary total levy at $536,452, a 25 percent increase over payable 2019’s final levy.
The general fund levy accounts for $427,152 of the proposed payable 2020 levy, with debt service payment comprising the remaining $109,300.
Council member Karol Andreasen asked if there was “a ceiling” for the preliminary levy.
City Administrator Curt Kreklau said there was no limit and provided historical data. For payable 2017, for example, the city set a preliminary levy with a 29 percent increase, but the final levy was a 7 percent increase. The following year, the council adopted a 16 percent preliminary levy increase, yet the final levy was 4 percent.
According to Kreklau’s figures, the council proposed a 32 percent increase in the preliminary levy last year, but after budget cuts, adopted a .002 percent final levy.
“As it sits before you tonight, it would be a 19.7 percent increase,” Kreklau said of the payable 2020 preliminary levy.
“Is that enough? Will that make us good with Standard and Poor?” Andreasen asked.
Kreklau noted that the general fund had shortfalls for three years in a row. He pointed out that an appropriation from an unassigned fund balance is one option to alleviate a levy increase. “Over the long run, you run out of unassigned funds, so that’s a strategy, but it’s not a terrific one. We need to be very realistic,” Kreklau said, adding the cost of business goes up every year. “There is inflation. Since there was no increase last year, that puts some additional pressure on this year’s levy.”
Andreasen said the fire and police departments need new equipment and vehicles. “We’re going to have to fund those areas most important to the citizens of Menahga,” she said, proposing a 25 percent levy increase.
Council member Art Huebner said he was concerned about unknown expenses. He wondered whether 25 percent was enough.
Mayor Joan Liimatta said if the city sets a 25 to 30 percent levy increase, “we’d probably have a mass exodus out of Menahga.”
Huebner suggested appointing two council members to comb through the budget before the final levy is set in December.
Council member Tim Ellingson disagreed, saying, “It’s our job as a collective group, not just two people’s.”
Limatta concurred. “We need five voices in every phase of this. If we have to have more special meetings to take care of it, I want all five of our voices heard.”
She asked council members to send their budget questions to Kreklau by noon Oct. 4.
Andreasen made a motion to adopt a 25 percent preliminary levy increase, which was approved unanimously.
In other business, they approved two items that had been previously tabled: payment of a worker’s compensation invoice for $11,266 and the 2020 health care plan for city employees.