South St. Paul sets final budgets and tax levies

This chart shows the breakdown of taxes and expenditures for the 2017 tax-supported funds.

The South St. Paul City Council has finalized its 2017 budget. The preliminary tax levies and budgets were set on Sept. 6. These numbers set the cap for the budget and levies. 

Steve King, city administrator, said if not all resolutions were approved at the Dec. 5 public hearing, the council did have its Dec. 19 meeting to finalize everything.

King said staff hoped the council would act on adopting the final tax levy and budget on five items that utilize property-tax levies to pay for operations: general fund, public library, Doug Woog Arena, capital program and debt service. 

The housing and redevelopment authority and the economic development authority also have separately adopted 2017 budgets and proposed tax levies to help pay for their operations. 

King said one resolution staff was asking the council to adopt was the final 2017 property-tax levy of $10,466,008. This was an increase of roughly $638,400 from the 2016 levy.

“That is a little less than the preliminary levy you adopted back in September,” King said. 

King said this figure was about 58 percent of revenue to fund the five items.

Council was also asked to approve a resolution that approved the budget for those five funds. The proposed budget was set at $18,124,872, an increase of roughly $771,400 over the 2016 adopted budget. 

King said council was asked to adopt a resolution for the EDA final tax levy. Staff was recommending the levy be set at roughly $208,900.

“That helps pay for the individual we brought on board this calendar year for economic development and economic manager. There was a consensus to increase our focus on economic development and the underlying tax base that helps pay for the services,” King said. 

The proposed HRA property-tax levy was roughly $250,000 for collection in 2017.  

Another resolution before the council was for the approval of the fees and charges schedule.

The final resolution was for the 2017-2021 capital improvement program. King said over the course of its existence, the city has had many major capital improvement programs that needed to be done. 

“We try and estimate how to put the spending on some kind of level so that you don’t have spikes in any given year,” King said. 

Michelle Pietrick, finance director, said the 2017 budget had strategies that were similar to those in 2016 including growing tax base, and maintain and stabilizing the existing tax base. 

Pietrick said the city provides high amenities and services and associated costs that are relatively consistent with other communities. However, South St. Paul has a smaller tax base, which limits the opportunities for a price break. 

The city has a substantial reliance on Local Government Aid from the state. Pietrick said the 2017 budget set aside $900,000 for capital funding versus operations. 

The LGA received by the city is the third highest in the area, after Minneapolis and St. Paul.

“This can be seen as a measure of weakness of our local tax base,” Pietrick noted. 

Pietrick added that the plan is to migrate to 50 percent of LGA for operations and 50 percent for capital infrastructure. 

Compared to surrounding cities, South St. Paul has a modest tax base. The mean single-family home value for 2017 is $168,486, which is lower than surrounding cities. 

On the positive side, the mean value of properties increased by roughly $7,600 from 2016.

Residents may see increases in their property tax bills due to several reasons, including rising property values, changes in the use/state class of their property, changes in ratio and other levies including school district and county. 

The estimated 2017 city tax on a mean residential value is $919, a $30 increase from 2016. Some properties may be higher or lower depending on their value. 

“When I presented this in September the estimated impact of the city levy at that point in time was $52,” Pietrick said. 

South St. Paul’s tax capacity value increased 5.1 percent, which is a good thing, Pietrick said. 

A public hearing was held at the meeting. No one came forward to speak.

Council member Dan Niederkorn said he was glad the numbers could be “whittled down as much as they did.” 

“I can’t tell you how happy I am about that,” Niederkorn said. “I was feeling a little nervous in the beginning when we did that in September. I really was because I thought we were doing a disservice to our citizens by putting a budget forward that was that expensive.”

Niederkorn he added is proud of city staff and council members for the work they all put in to it.

Council member Tom Seaberg said to have the average property value increase is a step in the right direction. 

All resolutions were approved unanimously. Council member Marilyn Rothecker was absent. 

Council member Bill Flatley reminded those listening that approving the capital improvement program does not give blanket approval. Things will come before the council project-by-project. 


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

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