South St. Paul sets 2018 budget

The end of the year means cities finalize their budgets for the coming year. At its Dec. 4 meeting, the South St. Paul City Council approved its 2018 budget and property tax levy, as well as the city’s 2018-2022 capital improvement plan.

Residents’ property taxes are set to increase. The estimated city tax on a mean value home will be $1,040, an increase of $110 for the year. 

City Administrator Steve King said property taxes are divvied up and go into various funds, including the city’s general fund and funds that support the library, Doug Woog Arena, capital programs and debt service. 

The final tax levy and property tax-supported budgets were approved 4-1 with council member Bill Flatley as the lone dissenter.


Proposed 2018 budget and levy

There were strategic goals the council wanted set with the 2018 budget, including increasing public safety and code enforcement funding, the continued need for parks facilities and maintenance staffing, an increase in IT staff, addressing communications for the city and putting in place a succession plan for the city administrator. 

Michelle Pietrick, finance director, said staffing changes in levy-supported funds add up to $764,850. Two officers and administrative support in the police department equal out to just more than $204,000. 

Projected city expenditures for the five tax supported funds in 2018 are around $19.3 million, an increase of $1.2 million. Property taxes will support those expenditures in the amount of roughly $11.4 million, an increase of $968,000. 

Pietrick said if all the non-levy supported items were included, the budget would be $33.1 million. Property taxes would cover 35 percent of the total budget, she said. 

Pietrick said the city does receive local government aid, which will increase by almost $120,000 for 2018. Fees and fines are increasing by about $100,000, which includes an increase in the the Xcel Energy franchise fee.

Besides the operating budget, Pietrick said the council is also looking at the 2018-2022 capital improvement plan. The requests include pool and park maintenance, sidewalk and street improvements, police equipment and various other minor purchases.

Pietrick said past experience shows many projects that are in the plan at this time may be modified or deferred if grant funding doesn’t come through. Each project in the plan comes back for formal approval.


Property taxes

The mean value for a home in South St. Paul increased to $185,400. Pietrick said as market values increase, the market value exclusion decreases. The taxable market value increased this year by 10.57 percent to $164,200.

Pietrick put a silver lining on the $110 increase in city taxes for mean value property owners.

“I can say with a high degree of certainty that the increase in city taxes is mainly a function of market value increases in your individual properties,” she said. 



City Attorney Kori Land said back in 2015, the city renewed its franchise agreement with Xcel Energy. At the time, it was anticipated the fee would eventually inch up to 5 percent.

The franchise fee is set by the city and paid by Xcel customers as a percentage on their monthly energy bill.

The original franchise agreement isn’t changing with an ordinance approved Dec. 4, which increases both the gas and electric franchise fees from 4 percent to 5 percent, effective April 1, 2018.

Council member Bill Flatley said the impact of the increase will be felt most by small businesses and said he couldn’t support it. The franchise fee increase passed 4-1.



Council discussion

Flatley said he understands the need to address the council’s strategic goals, while putting the property tax increase in terms of his personal budget.

“I can’t walk into my payroll department at work and say ‘Give me a bigger check because I need more money,’” he said.

Flatley said he has heard from quite a few residents that the city is inching toward tax levels seen in Ramsey and Hennepin counties.

“We talk about poverty levels and things in town. This isn’t going to help our tax-paying citizens one bit,” he said, adding city is biting off more than it can chew and should have prioritized its goals. 

Council member Tom Seaberg said he comes from the other side of the fence. He thinks residents want and expect the city to act like other communities in the area. Seaberg said a lot of the staffing changes that are recommended were heard over and over. 

“I don’t think we need to wait to 2019 just because the school district passed a bond referendum,” Seaberg said. 

Council member Lori Hansen said she has been on the council through a range of increases. Having to look at what the city needs and the services provided, it is important to raise taxes, Hansen said. She said the time was now to fill needed positions within the city, and her goal for next year is to get the levy increase back down to 5 percent.

Hannah Burlingame can be reached at 651-748-7824 or

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