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The Albert Lea City Council on Monday approved an overall 5.5% preliminary tax levy increase for 2024.

The change totals about $404,000, which includes an increase in the general fund levy of $262,000 — or 4.75% — and an increase in the debt levy of about $142,000 — or 7.79%.

Albert Lea City Finance Director Kristi Brutlag said with the change, a $100,000 home that stayed the same in value from 2023 to 2024 would pay about $19.62 more in city taxes in 2024.

Brutlag said the preliminary budget for 2024 is about $19.91 million, an increase of about $1.798 million — or 9.9%.

Increases in personnel costs are expected to be about $1.22 million higher in 2024, and supplies, services, charges and transfers are expected to be about $574,000 higher. She said personnel costs take up 70 to 75% of the general fund budget.

Some of the increases in the personnel costs stem from the implementation of the city’s compensation and classification study and increases in health insurance rates.

Other expenditure changes in 2024 include $25,000 for a council strategic plan, $39,000 for election costs, $55,000 to rebuild and secure the city’s website and $189,000 for additional IT costs.

Brutlag said Freeborn County, which provides IT services for the city, had previously only charged about $90,000 for the services, which included mostly software. She said when the new IT director took over, the county stopped and looked and recognized this and said, “We’re not charging you enough.”

The new costs will now cover some of the salary costs, too.

Albert Lea Mayor Rich Murray asked if the city had looked at hiring its own IT person.

Brutlag said with benefits, the cost would be at least $125,000 for one individual alone, let alone the hardware and storage costs. The issue will be reviewed after a year.                  

Expected revenue changes include $1.07 million more in local government aid, $300,000 in additional franchise fees, $60,000 in rental registrations, $70,000 for the new school resource officer and $38,000 in refuse cleanup. The city will not have about $30,000 in revenue from renting out 314 S. Broadway and the Jacobson building.

Overall, about 35% of the city’s budget comes from local government aid, 29% from property taxes, 14% from charges for services and grants, 12% from the utility funds and $10% from franchise fees for gas, electricity and cable television.

About 43% of the city’s budget is spent on public safety, 21% on culture and recreation, 16% on public works, 15% on general budget and 5% for transfer funds for equipment like police cars and street equipment.

Brutlag said the city’s tax capacity was expected to go up about $237,000 or 1.69% in 2024.

State law requires councils pass the preliminary levy by the end of September. The final levy cannot be increased from the preliminary levy when the council votes in December but can only be decreased.

The council and staff will continue to review budgets in detail over the next few months and finalize the budget and capital improvement plan for the next five years.

The final tax levy and budget, fee schedule and capital improvement plan is expected to be voted on Dec. 11.

In addition to the city’s tax levy, the council also approved a preliminary $100,000 increase in the Housing and Redevelopment Authority’s levy for a total of $250,000. The money would go toward security upgrades.

The final HRA levy will also be approved in December.