By Per Peterson
The Tracy City Council on Monday adopted the 2022 preliminary budget and 7% tax levy. The preliminary tax levy must be certified by the county by Sept. 30.
The final levy will be approved at the council’s Truth In Taxation meeting at 7 p.m. on Dec. 13. Before then, the levy cannot be raised, but it can be lowered.
“We really feel this is a budget that can maximize our community investments as much as possible,” Tracy City Administrator Erik Hansen said. “The more that we can put back into our community, the better tax dollars are spent.”
The total expenditures for the 2022 preliminary budget are $14,626,573 on revenues of $10,013,635. More than half of the budget expenses will be used for capital outlay projects because of the Phase 3 infrastructure project.
The net position is projected to decrease $82,363 due to the use of $88,000 in unrestricted fund balance from the sewer fund for street maintenance.
The general fund has a projected net reduction in fund balance of $138,668 due to the use of fund balance for capital projects. Capital outlay projects will total $7,710,718 in 2022, with the bulk of those expenditures coming from the Phase 3 infrastructure project.
Long-term debt service payments will total $1,359,458. The property tax levy will total $1,334,887 — a 7% increase over the 2021 tax levy. All monies from the increase will be used for the City’s five-year capital improvement plan.
Fee increases in the 2022 budget include a 3% increase in water fees, 8% bump in sewer fees and a $.25 monthly increase in storm water fees. There are also minor increases in some fees at the aquatic center, building permits, and airport hangar rent. The amount of Local Government Aid the City will receive is projected to be $970,421. The budget includes a 2.5% decrease in operational expenses compared to the 2021 budget. Also, the City will see a 2.5% COLA for all employees, per its union contract.
The City’s long-term debt will decline in 2022 with the retirement of the 2016B bonds, but the City projects a significant increase in debt service in 2023 because of the refinancing of the 2019 temporary bond for the Phase 3-A street project into an $8.4 million long-term USDA bond. Debt service will then decline again in 2026.
The budget and levy were approved unanimously after a motion by council member Dave Tiegs and a second by council member Seth Schmidt.
“We really believe that this budget maintains services, while containing some costs through better budget tracking,” Hansen said. “We’re going to support growth through some very significant community investments — $7.7 million is a lot of money to put into a community this size. We’re doing a lot in this budget for the community.”