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In the Know column: Here’s how city of Alexandria creates a budget

Today, in less than 600 words, readers will get a peek at the process of creating the city budget for 2022. The budget is the single most important policy document the council adopts. SPOILER ALERT: Math and finance-talk ahead!

It starts with the Budget Committee. The city administrator, one council member and I meet weekly with department heads and stakeholders from April through mid- August. The purpose of the meetings is to gather data. City services offered, those being proposed and the level-of-service are top of mind at this time.

The data is used to create the financial forecast for the upcoming year and capital improvement needs for the upcoming five years. The committee then meets with the full City Council to make a recommendation and receive feedback. State law requires the budget be balanced and a preliminary budget and maximum tax levy agreed upon by Sept. 30. The truth-in-taxation public hearing for the final budget will be held on Monday, Dec. 13.

Questions most asked are:

City revenues come from three main categories. Property tax, sales and fees generated by City services, and inter-governmental sources. Property tax represents only 59% of city revenue. For the year 2022, Local Government Aid (LGA) from the State of Minnesota will represent 29%. The balance, 11%, comes from fees collected for licenses, permits, rental fees from the Runestone Community Center, municipal liquor store sales and other inter-governmental sources.

LGA allocations can fluctuate each year and are determined during the legislative session. The allocation is meant for support of critical community services. Each year the Budget Committee faces the questions: “Will LGA be approved?” “If yes, what will the allocation be?” Alexandria will, again, use its 2022 ($1.6 million) allocation to support the critical services of the police and fire departments.

How does Alexandria’s property tax rate compare with similar Greater Minnesota cities?

The 2021 city tax on a home with taxable value of $210,000 is $820.68.

How is $1 in tax dollars spent?

General fund (police, fire, parks, streets, administration, etc. – $0.61.

Debt service on previous building and infrastructure (roads, waterlines) projects – $0.17.

Alexandria Lake Area Sewer District – $0.08.

by Sara Stadtherr

Sara is the Communications Coordinator for the city of Alexandria. She is committed to the residents of Alexandria. Feel free to reach out to her for any reason, she would be happy to hear from you. To contact Sara, please email [email protected] or call 320-759-3607.

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