Independence City Council reviews 2025 draft budget, debates front-loading gravel-road spending

At a work session on Aug. 28, the Independence City Council reviewed a draft 2025 budget that administrators said is roughly $45,000 lower than at the prior meeting while overall spending would rise about 4.5% and the city's tax-rate calculation sits near 30.55%.

City Administrator Kaltsas told the council the draft moves the general budget projected increase from 6.3% to 5%, driven largely by changes in WHPS and fire budgets and a planned increase in gravel-road spending. Kaltsas also said Hennepin County assessor fees dropped to zero for the budget year, a roughly $80,000 reduction in typical costs, while recycling and calcium-treatment line items are up due to contract and price changes.

Chief Kroells said the WHPS decrease shown in the draft largely reflects a prior-year work credit for longevity and tweaks to wage assumptions. "We had 150 applications 10 years ago. We can't even get 1 a month now and the job has been posted for over a year!" Kroells said, describing recruitment and retention pressures and noting he reduced proposed wage increases from 8.4% to 7.5% as part of the adjustment.

Steve McDonald, the city's consulting auditor, said property values rose about 8% in the current cycle and helped keep the city's tax rate lower even as the levy grows. Kaltsas and McDonald also noted the city expects to add roughly $100,000 in gravel-road line items for 2025 as part of the capital push.

Councilors debated several levy scenarios to smooth a projected increase in 2026. Kaltsas outlined an existing debt levy of about $315,000 for 2026 and the prospect of adding roughly $246,000 in two years if a larger gravel program proceeds. Councilor Spencer proposed front-loading more of the gravel work into 2025 (conversation ranged from a preliminary 5.99% to 7.5% levy increase in various scenarios) to reduce a steeper jump later; Kaltsas cautioned the council can certify a higher preliminary levy and reduce it later if needed.

On the fire budget, Kaltsas said Maple Plain eliminated a finance clerk and contracted ABDO for finance services; Kaltsas said Maple Plain added an administrative fee and asked Independence to pay $37,000 toward it. Councilors asked for clarification on what the fee covers before committing to that increase.

Kaltsas said the council will consider the draft again at the second September meeting and that the city can adjust numbers before final certification. He also noted two years of roughly $30,000-per-year federal ARPA funds are available to offset public safety costs but that those offsets will not continue indefinitely.

Next steps: staff will return a refined draft to the council at the next regular meeting with clarifications on the Maple Plain administrative fee and options for timing and sizing the gravel-road program.