Scandia taxpayers are likely to get somewhat of a break next year due to the COVID-19 pandemic.
Utilizing federal funding from the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Scandia City Council is planning to lower its local tax levy amount prior to adopting its 2021 budget in December.
“The CARES Act has put the city in a position of having more cash than we anticipated,” City Administrator Ken Cammilleri said.
During their Nov. 4 meeting, the council approved another short list of expenditures from the CARES Act fund and agreed to apply the remainder of the fund to offset wages of the city’s contracted sheriff’s deputy and fire department staff.
Cammilleri said offsetting law enforcement and other staff wages has been recommended by the League of Minnesota Cities and a city clerk’s association.
“They’re operating on the assumption that [their] duties are fundamentally changed in the world of COVID,” Cammilleri said.
The city received a total of $311,080 from the CARES Act in March and had used roughly $106,000 of it as of Nov. 1, for personal protective equipment (PPE), sanitizers and cleaners, technology for conducting city meetings, and a walk-up window in the vestibule of the city hall/community center building. An additional $48,000 for a key card access system and security cameras for the city buildings and $84,000 for an audio-visual system for the large room of the community center have also been earmarked.
Though the council decided in an October budget meeting to attempt to reduce the local tax levy for 2021, it remains to be seen what impact the offset wages will ultimately have. One option proposed would be for the city to reduce its levy by 1.1% from what has been proposed, to a total increase of 6.4% over 2020. That would essentially set the city’s tax rate flat compared to last year, given the increases in property value.
Other options presented to the council in October might reduce the levy to 5.3% or 3.3% increases over 2020. Cammilleri said he is preparing budget proposals for all three possibilities.
“We won’t know until December,” he said.
In September, the council set its preliminary local tax levy for 2021 at $2,613,824, an increase of $183,878, or 7.57%, over 2020.
That amount may be decreased, but cannot increase, before the final budget is approved. The city’s local tax levy also increased by 7 percent from 2019 to 2020 after several years of zero increases.
The council will hold its Truth In Taxation hearing on Dec. 2 at 6:30 p.m. and likely adopt a final budget that night.
The next Scandia City Council meeting will be held Nov. 17 at 7 p.m.