Olmsted County’s property tax levy could be scaled back Thursday.
County Administrator Heidi Welsch said commissioners have been presented with two options recently, reducing a preliminary 4.5 percent levy increase to a 3.9 percent or 4.2 percent increase.
It’s a difference that amounts to approximately $310,000 in collected property taxes throughout the county.
“What they are planning right now is 4.2 percent,” Welsch said of a decision made through two days of budget discussions.
The decreased levy would provide a slight reduction in county property tax estimates mailed to property owners in recent weeks.
At the same time, the added funding from bypassing the lowest recommended increase would be dedicated to work on county roads, with a specific project in mind, according to Welsch.
County Road 101, also known as 45th Street Southeast, is the county’s most-traveled gravel road, with close to 1,000 vehicles a day, and has been eyed for paving. But the estimated $2.8 million price tag needs to come from county coffers.
Earlier this year, Olmsted County Public Works Director Kaye Bieniek said the project was expected to be pushed back to 2021.
Welsch said commissioners are hoping to change that, if possible
“It’s time for that to get done,” she said.
Welsch said the ability to reduce the anticipated tax levy and have extra funds available to catch up on road construction stems, in part, from savings related to county staffing.
While the proposed 2020 budget provides for contracted wage increases and adds the equivalent of eight regular full-time employees in a variety of services, including two narcotics investigators, the potential budget increase was reduced by $1.2 million to account for annual savings related to the fact that all budgeted positions are not filled throughout the year.
“We’re going to budget closer to the bone,” Welsch said, noting administration and finance staff have been monitoring the impacts of retirements, leaves and other changes that occur throughout the year.
She also noted the county has reduced its planning staff by six people since Rochester started taking over planning efforts.
Another area of reduction in the baseline budget comes from an anticipated $873,000 decrease in the cost of outside services, such as contracts related to out-of-home placements of children.
“We looked at it over the past several years,” she said of determining the potential budget reduction.
Welsch credited staff efforts and the commitment of the county commissioners for reducing the costs over time.
“Every county around is seeing the number rise, and we’re seeing it drop,” she said of how many children must be placed in foster care away from family members.
Wilfredo Roman Catala, the county's chief financial officer, said unspent funds in the 2019 budget could add up to $6.2 million by the end of the year. Half the funds come with restricted uses.
The restricted half is based on unspent sales taxes dedicated to road construction and maintenance.
“That number will increase for sure, now that we have issued bonds, and we will have unspent bonds at the end of 2019,” he said of the $3.1 million estimate. “I don’t have an updated estimate.”
Roman Catala said the unrestricted $3.1 million estimate is based on potential savings from retirements, turnovers, hiring delays and people on leave, as well as other savings and increased revenue.
Welsch said the anticipated increases to county reserves are included in the final $272 million budget. Approximately $107 million — 40.67 percent — of the budget is funded through property taxes.
The overall budget, which includes efforts to catch up on deferred maintenance, will be the subject of the county’s annual truth in taxation hearing at 7 p.m. Thursday in board chambers of the city-county Government Center, 151 Fourth St. SE.
The public hearing falls two weeks after commissioners held budget talks that were left off the county’s calendar of public meetings.
Welsch said the omission was an error. “We thought we had it posted,” she said, noting the doors were open to the public.
The department-by-department review of the budget hasn’t been attended by residents outside the media in recent years, but Welsch said staff is working to ensure the lack of public notification is addressed in the future.