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Property tax increase likely in 2017 under proposed East Grand Forks city budget

East Grand Forks residents will likely see a higher property tax bill next year if the City Council passes the city budget as proposed Tuesday. City Administrator David Murphy and City Finance Director Karla Anderson presented a preliminary draft...

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East Grand Forks residents will likely see a higher property tax bill next year if the City Council passes the city budget as proposed Tuesday.

City Administrator David Murphy and City Finance Director Karla Anderson presented a preliminary draft of the budget to the council with an 18 percent levy increase from the 2016 budget.

The increase doesn't translate to an 18 percent jump in tax bills, but the city doesn't have the financial information from Polk County to calculate how much of an increase residents will see. That information likely won't be available until next month, Murphy said.

As presented, the city would seek to raise $4.5 million through the property tax levy, up from $3.8 million in 2016. In total, the city is projecting $10.61 million in revenue and $10.44 million in expenditures, leaving about $173,000 in extra cash.

"With that there's a couple of options," Murphy said. "We could leave it where it's at and add to our fund balance or turn it back. There are several different things you could do."

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The city is looking at a long-term plan to build up its monetary reserves, which fall below the percentage recommended by best practices.

Under this budget, overall revenues increase by 9.8 percent while expenditures climb by 8.3 percent.

The council has until Sept. 30 to certify the preliminary budget by turning it into the county. Once the levy is certified, it cannot be increased but can be decreased.

The council has two upcoming work sessions to discuss any changes and then will vote on giving the budget preliminary approval at its Sept. 27 meeting.

The budget does not include funding city staff had hoped to see from a sales tax that would have covered the $2.1 million renovation of the city's swimming pool.

Passed by public vote, the tax also needed approval from the Minnesota Legislature, but the bill it was included in was left unsigned by Gov. Mark Dayton. A special session where the bill could have been revived will not happen, Dayton announced last week.

The city has secured a loan from its Water and Light Department to cover the renovation and will begin paying interest on the loan starting next year, which is included in the budget, Anderson said.

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