Plans for Rochester’s 2020 budget are likely to provide some wiggle room.
With a recommended $387.6 million budget that would include a 5.77 percent property tax levy increase, the Rochester City Council offered tentative support for setting the maximum levy at a 6.5 percent increase over this year.
“I’m not getting pushback on establishing 6.5 percent,” City Administrator Steve Rymer said Monday while discussing the recommended budget with the council.
Raising the proposed levy increase from 5.77 percent to 6.5 percent would provide approximately $545,000 in additional property tax revenues.
The added funds could also provide the city with the ability to restore a portion of a $3.7 million shortfall found in funds related to past street construction projects. Rymer said the past deficit spending was discovered during this year’s process.
Council Member Nick Campion said repaying the $3.7 million could be done over time to avoid a one-time hit to the city’s budget.
“We accrued it over an unknown amount of time, and it’s something we should pay back strategically,” he said.
Rymer has noted no interest charges are being accrued as a result of the fund deficit.
Under state law, the City Council must set a preliminary maximum levy by the end of the month. The preliminary levy means the council will not be able to increase the planned property tax revenue included in its 2020 budget as it hammers out details before adopting the final budget in December.
The council is scheduled to vote on setting the preliminary levy during its Sept. 16 meeting, which is the only regular meeting scheduled before the deadline. Once set, the amount cannot be increased, but it can be decreased.
For budgeting purposes, Rymer said the extra funds would be set aside for potential use as the City Council continues budget discussions, with the potential of reducing the levy if the total amount isn’t needed.
“We’re not going to strive to reach 6.5 percent,” Rymer said.
Council President Randy Staver said the proposed increase offers flexibility heading into next year.
“This gives us a little time over the next several weeks before we have to set that amount,” he said, also noting that other issues might arise for the future budget.
“It might be a good thing to have some flexibility without being irresponsible about it,” he added.
Council members indicated they expect to see changes as policy and spending discussions continue.
“I wouldn’t want to signify that any point is settled on how the budget is spent beyond what the maximum levy would be at this point,” Council Member Michael Wojcik said. “I’d like to get to that as quickly as possible, but not at this point.”
Among items that appear to be unsettled is the potential cost for proposed signs changing residential speed limits to 25 miles an hour and some requests from outside agencies.
Rymer said discussion on those topics will occur as budget work continues. He also suggested a plan to review other potential funding sources before the year ends.
Additionally, the City Council will discuss proposals related to new programs and staff positions that could increase revenues.
“When we set the maximum levy, we are not ruling out any fee-funded positions,” Campion noted, pointing to a proposal to add to the city’s fire marshal staff, which could bring increased inspection revenue to cover staffing costs.
As discussions continue, the City Council is slated to hold a public hearing on the final budget during its Dec. 2 meeting.