<CENTER><B>Council takes stab at 2001<br> preliminary budget</B></CENTER>

Early predictions show a slight increase

in city property taxes next year

By Sara Quam

The Luverne City Council on Monday made progress in refining the 2001 city budget.

The preliminary levy won't be approved until September and won't be finalized until December, but the preliminary work required much council discussion.

As the budget reads now, the proposed city levy will affect average homeowners by an increase of 1.6 percent if their property values stay the same. Commercial properties will actually see a decrease on the city line item of their tax statements.

The council still has time to alter the budget before approving the preliminary levy at a special Sept. 13 meeting. After that meeting, the city can decrease the levy before finalizing it in December but cannot increase it.

Up for discussion

Budget talks highlighted proposed changes that were out of the ordinary for the city budget.

For example, various departments requested Border City Legislation funding, an automated meter-reading system, an upgraded generator, land acquisition and an incubator building to be used for multiple businesses.

Other large costs for the city are the underground electrical wiring project, well water developments and funding for the Lewis and Clark Rural Water System.

Because most of those mentioned projects fall in the city utilities budget, Councilman Keith Erickson said, "I think that when a special project comes along, we can postpone some long-term projects so we can provide stability [in the utilities budget]."

City Administrator Matt Hylen said that planning five years into the future is difficult when special projects like tax increment financing come up. "There are peaks and valleys, and there will continue to be peaks and valleys," he said.

Because of the increased number of utility projects, coordinator Red Arndt said he could postpone the automated meter-reading system until the 2002 budget. He said the generator upgrade is more important to the city because during a disaster it could sustain the city's water use for more than the day-and-one-half the current system allows.

The city's generator has been used seven or eight days already this year, so Arndt said an upgrade won't be a costly item that goes unused. The city will try to purchase a used generator.

The Economic Development Authority has a capital budget for the first time since it was started in 1996. With $500,000 as the high estimate for an incubator facility, the council may or may not allow for that expense.

"It's being talked about at the state level so we shouldn't have to pull this wagon by ourselves," council member Alex Frick said about possible state funding for an incubator project.

An incubator building could be used as a general office and meeting place for local companies that aren't equipped to handle that aspect of their business.

The meeting ended on a high note with Barb Berghorst, the city's financial manager, pointing out that the city has raised the tax rate by only 7.91 percent over the past seven years.
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