Park Rapids City Council approves $3.5M budget for 2021
The council passed its final general fund budget and property tax levy as well as its enterprise funds budget on Dec. 8.
The Park Rapids City Council on Tuesday approved the city’s final general fund budget and property tax levy for 2021.
Treasurer Jeremy Jude noted that the general fund levy actually decreased since the council’s general fund budget workshop on Nov. 24. He explained as city accounting staff was double-checking their work, they found an overlooked revenue item on the 2020 budget – delinquent taxes for $36,000 – that should continue in 2021.
As a result, he said, the 2021 general fund levy will decrease by $5,657 or 0.27 percent from 2020, to $2,057,629.
Meanwhile, the levy for bonds and debt service rising $12,862 or 1.78 percent to $735,189. This means the total levy for 2021 comes to $2,792,818, an overall increase of $7,206 or 0.26 percent.
The council also approved the city’s enterprise fund revenues and expenses budget for 2021, unchanged since its Dec. 14 enterprise budget workshop.
Revenues budgeted for each enterprise account are $846,516 for the airport; $673,830 for utility water; $454,150 for sewer; $3,619,657 for the liquor store; $110,875 for stormwater; and $14,751 for the public works/public safety building’s internal service fund.
On the expense side, $840,146 is budgeted for the airport fund, $1,671,190 for water, $1,048,578 for sewer, $3,264,514 for the liquor store including a $75,000 transfer to the airport fund, $217,308 for stormwater, and $78,050 for the internal service fund. Depreciation expenses are included in these amounts.
Council member Erika Randall made separate motions to approve both budgets, and Liz Stone moved to approve the levy; all three motions passed unanimously.
Truth in Taxation hearing
Jude made the city’s annual Truth in Taxation presentation, beginning with an explanation of the budgeting process.
He stressed that property values are assessed by a licensed assessor at least once every five years, following use-based tax classifications. Tax rates are set by state law, but classifications can be challenged by attending the city’s board of appeal and equalization in the spring.
According to Jude’s presentation, the city’s 2021 budget projects revenues totaling $3,480,020. Of these dollars, 59 percent are expected to come from the property tax levy, 17 percent from local government aid (LGA) and 24 percent from other sources.
LGA revenues continue an upward trend since they bottomed out at $314,126 a year in 2010-13. Next year’s commitment of $590,141 is comparable to 2003 levels, the year after LGA peaked at $688,836.
Moving on to expenses, the city has a total general fund budget of $3,580,020, a deficit of $100,000 compared to revenues. Jude explained the deficit budget on Nov. 24, saying the city will use a portion of its net position increase during 2019 to reduce the tax impact of this year’s budget increases.
General fund expenses for 2021 break down into 50 percent for public safety, 23 percent for general government, 18 percent for public works, 7 percent for culture and 2 percent for community development.
The budget for public safety expenses, totaling $1,789,321, breaks down further to 78 percent for police, 16 percent for fire service, 5 percent for building inspections, 1 percent for rental inspections and less than 1 percent for plumbing inspections.
Public works expenses budgeted for 2021 total $635,833, and include 72 percent for streets and highways, 15 percent for street lighting, 11 percent for ice and snow removal and 2 percent for sidewalks and crossings.
Culture has a total budget of $256,034, with 58 percent going to parks and 42 percent to the library system. The budget for parks increased due to an increase in insurance and labor costs.
Community development has a budget of $70,031, of which 69 percent for economic development goes toward the Heartland Lakes Development Commission, and 31 percent assigned to natural resources goes toward urban forestry.
General government expenditures totaling $828,801 are budgeted to include 42 percent for administration costs, 10 percent for attorney services, 18 percent for planning and zoning, 8 percent for the city hall building, 5 percent for assessing, 2 percent for contractual services on the annual audit, 4 percent for council expenses, 3 percent for transit (setting money aside to help the Heartland Express buy a new bus), and 8 percent on unallocated expenses.
Jude’s presentation will be posted on the city’s website, ci.park-rapids.mn.us.