Updated at 11:27 a.m. Friday.
The Savage City Council voted unanimously to adopt the proposed general fund budget and tax levy for 2020 at the Sept. 16 city council meeting.
The council vote locked in the maximum levy, however, city officials will continue discussing the budget and potential modifications this fall at city council work sessions. City officials can vote on changes that decrease the levy, but cannot increase it.
Financial Director Julie Stahl said that minimizing the city’s tax impact, maintaining existing service levels at an affordable cost and meeting the needs of the city’s growth were the key objectives in creating the budget.
According to the proposed budget, the city’s total expenditures will increase by around $612,000, which is approximately a 3.9% increase from 2019. The total proposed budget for 2020 is approximately $16.2 million.
The general fund tax levy amount is proposed to increase by approximately $576,000, which is a 4.3% increase from 2019.
Just over three-fourths of the city’s proposed spending will go toward existing employee wages and benefits. There are no new city staff positions proposed in the preliminary budget.
The largest spending by department goes towards the Savage Police Department, which represents 39% of the city’s budget. The Public Works Department follows, accounting for 18% of spending.
The city’s property tax rate has decreased annually since 2014 due to growth in the city’s tax base from new homes, increasing property values and other development.
The tax rate is expected to decrease by 2.27% in 2020, according to Stahl. However, many homeowners will still see an increase on their city portion of the tax bill as their property values increased faster than the tax rate decreased.
Stahl said the average home value increased by roughly 6%, according to Scott County. A home with a market value of $350,000, which experienced a 5% increase in value, would see a $1.08 annual increase on their city portion of the tax bill. The same home, with a 7.5% increase, would see a $42.11 annual increase.
Scott County will send proposed tax notices to residents in November. A public hearing on the budget will be held Dec. 2, and the council will vote to adopt the final budget and tax levy on Dec. 16.
Correction: An earlier version of this story incorrectly stated for which year the preliminary general fund budget and tax levy is for. It's for 2020.