While at the same time reinforcing its goal to have no property tax increases in 2010, the Albert Lea City Council on Monday voted 5-2 to adopt a preliminary tax levy that could equal out to an almost 3 percent property tax increase for homeowners if approved in December.

The key word: preliminary. The figures leave the city wiggle room.

Specifically, the preliminary levy passed — for $5,095,375 — is $135,000 higher than the city’s levy in 2009. If this is passed in December, it would equal out to about $373 in city taxes a year for a home valued at $100,000, City Manager Victoria Simonsen said.

“I think it’s an important part of this whole process that we at least protect ourselves just in case something else happens,” said Councilor Larry Baker, on why he voted in favor of the preliminary levy.

Councilors who voted to approve the preliminary levy said while every councilor wants to set the levy at a zero percent increase, they also need to protect the city from potential unseen changes that could take place between now and the end of the year.

They stressed this was not the vote that will set the final levy; it’s a vote that will simply determine what is the highest taxable rate the councilors could levy for.

Mayor Mike Murtaugh and Councilor Al Brooks voted against the preliminary levy increase.

Brooks said it has always been his wish that there be no tax increase or a smaller increase if anything. He questioned whether any of a proposed increase would go toward the city’s reserves. He said he did not think the city was in the position to put money in its reserves, as it has already had to cut more than $1 million from its budget.

Simonsen said there’s not a specific amount set aside in 2010 to go into reserves, though the city’s reserves are under the amount recommended by the state auditor.

The auditor recommends that cities have the equivalent of six months of operating expenses in reserve. Albert Lea is couple percents lower than what it should have, according to this recommendation.

Simonsen noted some background about the levy and property taxes.

She said in Albert Lea property taxes are broken down as such: 28 percent goes to the city, 36 percent to the county, 35 percent to the schools and 1 percent to the watershed district.

In 2010, because the city will receive an unallotment of $1.2 million from what is received in 2009, the budget has already had to be cut in numerous places. On top of that, city revenues are also predicted to be decreased by 8 percent.

Simonsen said staff recommended passing the preliminary tax levy because the city still has health care costs, union costs and other items to finalize.

“It’s very clear to city staff that the intent is to have a zero percent tax increase in 2010, and that is certainly our goal,” she said.

Cities are required to establish a proposed tax levy — used to operate the general fund, public improvement bond debt service and capital improvement bond debt service — each year by Sept. 15 for the following year.

During the meeting, councilors voted to have a meeting to receive public input about the budget on Dec. 14. Cities have until Dec. 28 to certify a final levy to the county.

Look to upcoming editions of the Albert Lea Tribune or to AlbertLeaTribune.com for more about the Monday meeting.