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City presenter outlines roughly $5.9M levy in draft 2025 budget, projects modest tax-rate rise
Summary
City staff presented a draft $7.3 million general fund budget and an approximately $5.9 million property tax levy for 2025, saying the levy is needed to balance projected expenditures and that a homestead exclusion change shifts some burden toward commercial properties.
Deb, a city presenter, outlined the proposed 2025 general fund budget and the property tax levy during a budget workshop, saying the draft general fund totals $7.3 million and the anticipated total property tax levy is about $5.9 million.
The presenter said the levy estimate includes the general levy, debt service and small allocations for economic development and abatements and noted the city tax rate is a function of the levy and the local net tax capacity. She described how taxable market value is calculated — market value set by the county assessor, less exemptions such as the homestead exclusion — and showed a sample parcel calculation to explain how parcel tax capacity produces the city's portion of property tax bills.
Why it matters: staff said roughly two-thirds of general fund revenue comes from property taxes, so changes to assessments, exemptions or the levy can materially affect the city's ability to fund services. Under the draft numbers the city would maintain a balanced general fund at $7.3 million while proposing an increase in the levy compared with the prior year.
Details and impacts: using the presentation's example, a residential property with an estimated market value of $375,000 would see the city's portion of property taxes near $1,423 annually under the stated assumptions — about $6.80 more per month than the prior-year example cited by staff. Presenter also said commercial property owners would see larger increases under the projection, citing an example increase of roughly $62 per month.
Staff attributed part of the shifting tax burden to a change in the homestead market-value exclusion for 2025. "It is ... beneficial to your residents but it also means your ... commercial properties ... will be paying more taxes," Deb said in the presentation. The workshop did not include a vote; the presenter framed the figures as estimates used for planning and invited follow-up questions.
Budget priorities and staffing: personnel costs dominate the draft budget, comprising roughly 65% of expenditures, staff said. Public safety accounts for about half of all expenditures; the draft also includes an additional police position budgeted as a 17th officer (funding included for planning purposes only and not yet approved by council) and concept positions recommended from a 2023 staffing study, including an engineering technician and a streets/parks operator split between duties.
Other revenue and fund notes: staff reported a planned $450,000 transfer from the city liquor store to support services and future projects. The presenter said the city's unassigned fund balance is projected to remain within internal guidelines (presentation cited target-range percentages). She also noted a potential administrative change: if the Big Lake Fire Relief Association moves to the state fire retirement fund the city would no longer process passthrough pension payments.
Next steps: the figures presented were described as the finance team's draft and conceptual planning numbers; staff said departmental reviews and finance committee recommendations will be brought to the full council for further action. The presenter closed by offering contact information for follow-up: "my name is Deb ... give me a jingle," and provided a City Hall phone number.
