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Local tax levy set at $1.5 million |
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Wednesday, 19 March 2008 |
Alice Pickering
Linwood Area Reporter
At the Linwood Township annual meeting on Tuesday, March 11, residents approved a 2009 tax levy of $1.5 million.
The levy is $174,000 more than approved last year. It is also $63,000 more than recommended by the town board. The 2009 levy is a 13 percent increase over the 2008 levy.
Estimated non-levy revenue for 2009 is $177,500. To have a fund balance on hand at the end of 2009 of $788,068, to provide cash flow for bills through June 2009, the board requested approval of levy of $1.437 million for 2009.
Before the departmental budgets were discussed and the vote taken, auditors David Bloomberg and David Mol of HLB Tautges & Redpath gave information about the township financial status. Final reports on township finances were scheduled to be completed at the end of last week, according Bloomberg.
The first has to do with how the financial records are presented by the township. The second is to see if the township is following state laws regarding its financial record-keeping. The final report is about internal controls.
Bloomberg anticipates some recommendations about segregation of duties. This appears often in townships where there are a small number of employees.
Mol talked about the recommended budget reserve. Auditors recommend 50 percent of the annual budget to serve as the checking account to pay bills, until the first township payment from the county arrives in early July. Right now Linwood’s reserve is about 35 percent.
Mol tried to correct the impression of some residents that the township was trying to levy to cover the budget and keep half again as much in savings. Mol said they should try to understand that what is typically called a budget reserve is more like retained earnings to fund operations.
This has dropped in recent years, partially an effect of a series of levies smaller than those recommended by the board. This is the effect of reducing the levy. One way to manage with a lower than requested levy is to reduce spending. Another is to dip into the budget reserve. Linwood has used a combination of both.
With a series of reduced levies, at some point the township reserve becomes inadequate to provide the checking account balance, needed to pay bills through the first half of the year.
More on levy
Rudi McCurdy, a former supervisor, said in 2008, residents approved a levy $100,000 less than recommended by the board. Budget cuts, amounted to $68,000 and $32,000 was borrowed from reserves.
However, Fire Chief Joe Dolphy identified a transfer of $60,000 in the fire department fund to fire department capital fund. This is the fund in which the township has planned savings for future truck purchases. This meant the fire department fund balance would be near zero at the end of 2009.
Therefore, an additional $60,000 added to the $1.437 million would mean a levy request for $1.497 million in order to maintain adequate cash for operating expenses through June 2009. Marie Holm, a former supervisor, made the motion to approve a levy of $1.5 million for 2009.
The 2009 levy was approved by a vote of 70 to 39. Votes were counted by Mol and Attorney Gerald Randall.
Levy history
History shows that in 2001 Linwood residents approved a total levy of $1,066,550, which included a $400,000 one-year special levy for the fire hall. In 2002 a levy of $885,000 was approved, which included $100,000 for the township building fund.
In 2003, residents approved a levy of $1,031,677. The next year only $900,000 was approved for 2004, $138,000 less than requested. A levy of $1,648,000 was approved in 2005, amidst some protest about the large increase.
For 2006 the approved levy was $1.1 million, one-third less than the previous year. However, this was also $252,000 less than recommended by supervisors. Supervisors had to make cuts to the 2006 budget as a result.
In 2007 the approved levy was $1.2 million, $108,000 below the amount recommended by the board. In 2008 residents approved a levy of $1.326 million, $100,000 less than the amount recommended by the board.
Levies show increases, but not enough to keep up with basic costs of providing service.
The Citizen’s League of Minnesota (www.citizensleague.net) annually ranks communities by effective tax rank; average home value divided by average market value of homes in each community. The result is a measure of the percent of market value paid in property taxes.
In the 2007 property tax review comparisons, on average the total tax burden in Linwood places it 113 out of 117 metro communities, with an ETR of .795 percent. While individual parts of the property tax bill may increase or decrease, this is a measure of the total cost for the county, city, school district, and special assessments.
In 2006 Linwood ranked 111 out of 113 metro communities with an ETR of .796. Its rank was 67 out of 112 metro communities in 2005 with an ETR of 1.01. On average, Linwood ranks near the bottom of 117 metro communities in its total tax burden.
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