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Prelim levy set at 11 percent increase

The Two Harbors City Council set its preliminary budget and levy last week during a special meeting.

The preliminary levy was set at an 11 percent increase, which could go down before being finalized but not up. The increase in property taxes will give the city a $185,747 increase in revenue.

"Over the last couple of months, administration has met with department heads and brought those requests to the budget and finance committee," said finance director Miranda Pietila. "What you see tonight is a result of those discussions. In October and November, we will continue to review and adjust the budget for any necessary recommendations."

The general fund revenues for 2018 are expected to be $4,212,067, about a 4.9 increase and expenditures are expected to be $4,380,510, about a 5.8 percent increase. Local Government Aid (LGA) is expected to be $1,605,237, which is a 5.3 percent increase from 2017 and the largest source of revenue for the general fund.

"The second largest revenue for the general fund is from taxes, and in 2018 the general fund tax would be $1,869,019," Pietila said. "The third largest source of revenue in the general fund is transfers in, and that mostly comes in from the electric and gas funds. There's a 13 percent growth operating revenue that we do annually from those two funds to help the general fund."

With an 11 percent levy increase and no increase on assess market value, residents with a home valued at $124,000 will see a $49 increase on their yearly property taxes. Those with a home valued at $221,900 will see a $107 increase from 2017. The three largest portions of tax dollars go to general government, public safety and public works.

Councilor Cathy Erickson said they don't expect the market values of homes in the area to go up as much as it did last year.

"I think a lot of us saw increases in our assess value last year," Erickson said. "I think the county assessor did some pretty wide sweeping increases in assessments last year. We haven't heard for sure, but we think that they are leveling off."

Capital equipment purchases scheduled for 2018 include: a records management system for the police department in the amount of $19,618; a brush truck for the fire department in the amount of $20,000; a tandem dump truck for the public works department in the amount of $149,968; a new building for Odegard Park in the amount of $45,000; a lawn tractor for the cemetery in the amount of $11,000; rehabilitating taxiways for the airport in the amount of $54,000; and a jet fueling system for the airport in the amount of $10,000.

"We are utilizing some of our general fund reserve from prior years," Pietila said. "We probably might be able to go down (from 11 percent), but not a whole lot. If we go down a little, we're not really saving the taxpayers much money."

Pietila said the finance committee will continue to work on the budget until it and the levy are finalized during a meeting at 6 p.m. on Dec. 19.

Adelle Whitefoot

Adelle Whitefoot is a Michigan native who moved to Minnesota in Sept. 2014 when she started as a reporter for the News-Chronicle. She graduated from Northern Michigan University in Marquette, Mich., in 2012 with a bachelor's in English writing and has been a professional photographer since 2011. Whitefoot is the beat writer for the Two Harbors City Council.

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