December 5, 2022 City Council Truth-in-Taxation Public Hearing and Input Minutes

Mayor Droba went on to describe how the City had reduced their early estimate for the 2023 Levy from 10.23% to 5.91% by making the following budget changes: aid normally provided to each Partnership Organization by the Levy was reduced by 20% with a total Levy reduction of 1.67%; various City departments took budget cuts amounting to a 1.176% reduction, and the Fire Department’s fund for a new fire truck took a cut amounting to a 1.47% reduction.

Mayor Droba reviewed highlights and expenditures by fund as listed in Exhibit A, noting that the Local Government Aid (LGA) was certified to increase by $62,452 in 2023. The total amount of LGA from the State is proposed to be $4,483,368. The actual tax levy is proposed to increase in the amount of $200,608 or 5.91% over the levy for 2022. The statewide average increase in the 2023 preliminary levies for all cities is 9.1%. The total property tax levy is proposed to be $3,596,019. Mayor Droba noted that the City is very fortunate to continue receiving Local Government Aid from the State of Minnesota, reminding the room that there have been years (e.g. 2002) where the State has determined aid would not be distributed; in those years, the deficit created in the budget had fallen to the taxpayers.

Mayor Droba went on to explain the pie charts illustrating the 2022 Revenues and Expenditures in comparison to the proposed 2023 Revenues and Expenditures. These charts showed a 1% increase in the 2023 Budgeted Revenue for Sales & Use Tax which Mayor Droba explained to be allotted towards continued road maintenance. Finally, Mayor Droba explained that the 1-2% increase applied to nearly all budgeted expenditures for 2023 is due to overall inflation.

Ed Bates, 108 Riverview Blvd, explained that he spent time reviewing an early, rough draft of a working 2023 budget spreadsheet that he had been able to procure from City staff.  Ed Bates had expressed confusion regarding several items included in this document, and was advised that this confusion would be due to the early, incomplete, and working nature of the documents he had been referencing. Mr. Bates was invited to parlay with the City Administrator, the Council, and the Mayor at a time outside of this meeting— City Administrator Bergstrom guaranteed that any matters and items discussed would be made available to the public. Mr. Bates declined this invitation, further insisting the budget must be decreased. Mayor Droba explained that the existing budget covers bare-bones services that are expected by the community without proceeding with layoffs (i.e. making sure snow is plowed from streets, keeping the streets maintained, assuring water is flowing into homes, and sewage is flowing out, etc.). Councilor Krause reminded the room that, although this 5.91% Levy has not yet been approved for the 2023 year, it cannot be raised.

Mayor Droba announced that the Approval and Resolution for the 2023 Final Tax Levy Collectible and 2023 Budget for the City of International Falls, MN would be addressed during the next regular City Council meeting on December 19, 2022.