Breckenridge City Council met Monday, Dec. 2 to inform the public about local taxes and to adopt its 2020 budget and tax levy. The council approved the 2020 budget of $2,126,192 and tax levy $1,004,395, a decrease of one percent in city tax from the current year.
City Administrator Renae Smith informed the council and the public about the property tax system, factors that influence taxes, tax levy history and the proposed 2020 city budget and tax levy.
The general fund revenue total for the adopted 2019 budget is $3,027,521 and the proposed 2020 total revenue is $3,126,192, a positive change of $98,671. Sources of revenue are intergovernmental with 57 percent, taxes with 26 percent, charges with 8 percent, transfers with 7 percent and licenses/permits, fines/forfeitures and miscellaneous each at one percent.
The general fund expenditures total for the adopted 2019 budget is $3,025,004 and the proposed 2020 expenditure total is $3,124,007, a $99,003 positive change. Sources of expenditures are public safety with 27 percent, public works with 23 percent, transfers with 14 percent general government and recreation each at 12 percent, insurance with two percent and economic development at 0.4 percent.
In summary, the city council unanimously approved the proposed 2020 budget at $3,126,192 and a tax levy of $1,004,395, a decrease of one percent in city tax. The following step is for the Wilkin County Auditor to certify the tax levy.
Smith explained that an assessor sets the proposed property value based on comparable sales and the county auditor will then send valuation notices to property owners, residents are allowed to question their proposed property values. Values are then finalized and set for calculating taxes.
The city adopted proposed levy and budgets in September 2019 and finalized them in December 2019. Wilkin County will then collect taxes and distribute to the city of Breckenridge.
Factors that influence citizens’ total taxes are property market value, tax capacity, property, state aid, special state laws, county budget and tax levy, school operating levy and school district voter-approved levies. Additionally, the city budget and tax levy influence total taxes, which was the topic of discussion for Monday’s city council meeting.
Smith explained that the city tax levy is the overall bucket of tax dollars that are levied and the general fund budget is the pool of money used for city operations, services and wages.
Services that are funded by the city tax are debt service, library, Port Authority and the general fund – in other words, what citizen tax dollars go towards.
The majority amount of the tax levy goes towards the general fund budget, followed by debt service, the public library and then Port Authority.
Debt service funds certificates of debts and bonds. Breckenridge currently has no outstanding certificates of debt but has two outstanding bonds. The first bond is expected to be paid in 2029 which covered refurbishing the north side fire hall, the Heritage South addition and Gewalt Park addition. The second bond is for the new city hall and south side fire hall, which is expected to be paid off in 2036.
The city tax levy provides the Breckenridge Library with free access to books, newspapers, internet, wireless printing and organized group activities for youth that are provided to the citizens of Breckenridge.
The city tax levy provides economic development through Port Authority. This group utilizes the Minnesota Investment Fund (MIF loans), border city tax credits and assists in housing development.
MIF loans provide gap financing for business development with a two percent interest rate. Bruder’s Butcher, Breckenridge Drug and Birchwood Psychological have been recent recipients of MIF loans obtained through Port Authority.
Border city tax credits serve new or expanding businesses such as Birchwood Psychological Center, Drifter Chic Boutique, Luken’s Food Stores, and Diversion Properties.
The general fund budget funded through the city tax levy provides public safety such as police, fire, criminal prosecution, emergency planning and sirens; public works such as snow removal, street and park maintenance, mowing and street lighting; general government such as city administration, city council, mayor, zoning, codes and elections; culture and recreation such as the senior citizens center, family aquatic center, parks and recreational programs and the family community center.
The next city council meeting will be held at 5 p.m. on Monday, Dec. 16 at Breckenridge City Hall.