Lake Shore residents could see a significant hike in their general revenue property tax levy in 2020, though council members indicated they would work to lower numbers before adopting the final levy and budget in December.

After talking about the 2020 budget in a workshop Monday, Sept. 23, the Lake Shore City Council adopted the 2020 preliminary levy and budget at its regular meeting on a 3-1 vote, with council member John Terwilliger opposed and council member Doug Miller absent, according to unapproved draft meeting minutes.

The preliminary general revenue tax levy was set at $1,297,255, which is a 24% increase from this year. The preliminary budget was set at $1,520,692, which is 19.9% higher than this year.

In 2019, the city levied $1,045,802 (27.8% higher than 2018), and the budget totaled $1,268,269 (20.9 percent higher than 2018).

Cities were required to approve preliminary levies by Sept. 30, and they can be decreased - but not increased - before final adoption in December.

Budget workshop discussion included the following, according to the unapproved draft meeting minutes:

Budget increases were attributed to the following increased operational costs:

  • 3% cost of living increase for employees. Employees received a 1 percent increase this year when the actual cost of living was 2.8% higher. It’s expected to be 2.6% higher in 2020.

  • 8.8% health insurance increase.

  • 1.6% increase for the Pine River Area Sanitary District.

  • 3% increase for the annual audit.

  • $2,250 for annual maintenance of 2.25 miles of detached trail (capital outlay).

  • $10,791 for elections (up $7,500 from 2018).

  • $3,000 for liability insurance.

  • $3,000 for fire contract.

  • $5,000 for snow and ice removal.

  • $3,400 to update the city’s zoning ordinance.

The budget also includes a request from the Initiative Foundation for $1,025.

Mayor Kevin Egan said these items are expansions of existing expenses to do business; the following are items new to the budget. Other operational and capital outlay expenditures to consider including in the 2020 budget are:

  • $50,000 increase for road maintenance as recommended by the city’s road/wastewater committee.

  • $20,000 increase for city hall maintenance.

  • $1,000 for iPads for the council and city hall upgrades.

  • $5,000 for a new irrigation system for the cemetery.

  • $7,500 for labor for special projects, like broadband.

  • $100,000 for road bonds, depending on a bond amount and number of years financed if the city moves forward with bonding.

  • $1,000 for software.

Paul Strong, from the city’s road/wastewater committee, said that committee received a draft capital improvement plan that would require the council to put extra funding in the budget. Council member Wayne Anderson said that in past years the city has gone over the budgeted amount for maintenance.

City Administrator Teri Hastings said some maintenance costs incurred in previous years were from storms, and Homeland Security reimbursed some of the costs.

Council member John Terwilliger asked if different grants were looked into that he had found available to municipalities. The Local Road Improvement Program grant hasn’t been funded as of now.

Terwilliger asked if the city hall maintenance, cemetery and software funds could be taken out of reserve funds. Council member Krista Knudsen said city hall maintenance shouldn’t be negotiable. Anderson said he didn’t see anything listed as negotiable.

The council discussed adopting the top numbers and working its way down before finalizing the budget in December.

Hastings said city hall maintenance was put together to help prioritize the projects that need to be completed over the next few years and can be budgeted for.

Terwilliger said the road bonds should be left off because Jacob’s Road was just patched and the city can wait one more year to see if LRIP funds become available. Knudsen disagreed, saying road bonds shouldn’t be taken off the preliminary budget until the council has discussed the options further.

At its regular meeting, the council set the city’s truth in taxation hearing for 6 p.m. Monday, Dec. 23, before its regular council meeting, for the public to comment on the proposed budget and levy before the council takes action.