Richfield City Announces 2021 Budget And Tax Levy

Press release from the City of Richfield:

September 23, 2020

At the September 22 Richfield City Council meeting the council passed a resolution that adopted the 2021 preliminary city budget and property tax levy. For 2021, the property tax levy will increase by 5.5 percent from the previous year.

Typically, forecasting revenues and planning a budget is a straightforward process that takes approximately six months and includes discussions and engagement with the city council, city staff and residents to determine an operating budget and tax levy that will work for the Richfield community.

However, 2020 was anything but a typical year.

“During the 2021 budget process we had to contend with the COVID-19 pandemic and the associated financial fallout, an influx of CARES Act funding, and a very uncertain future,” explained Richfield Finance Director Chris Regis. “We needed to build in a lot of flexibility to the 2021 budget so that if there is additional financial fallout from the pandemic, resident services will not be affected.”

Besides requiring the city to amend how it offered services to residents, the pandemic also negatively affected revenue. For example, the Passport and Motor Vehicle Services Office, which is one of the city’s primary revenue generators, is looking at a reduction of more than $300,000 for 2020.

Additionally, the Recreation Services Department, which annually serves more than 31,000 residents through its various youth, adult and senior programming saw its registrations decrease by more than 66 percent.

The total gross tax levy for 2021 will be $23,934,632. To bring that into perspective, if a single-family home in Richfield is valued at approximately $250,000, the taxpayer owning that home would realize an estimated increase in property taxes of $18 next year, if their property value remains the same.

Next year’s budget reflects an investment in technology infrastructure and equity, while keeping costs in-check.

If the COVID-19 pandemic has taught society anything it is that services need to be offered in a variety of platforms and models to ensure that customers get what they need.

“Residents want new and different services, most of which are online,” said City Manager Katie Rodriguez. “To keep up with this increased demand for virtual services and explore how we can transition traditional in-person services to different formats we will be adding an IT staff person.”

Besides investing in technology infrastructure, promoting and expanding the city’s equity initiatives will be a priority in 2021.

In 2017, the Richfield City Council passed a set of core values for the city to guide the work being done. The council was deliberate in including equity as a core value and, since then, the city has revised several service offerings, its hiring practices and participated in a cohort of the Government Alliance on Race and Equity.

“As a city, we have come a long way in a short amount of time in terms of becoming more equitable,” remarked Mayor Maria Regan Gonzalez. “However, we have a long way to go, so to accelerate this work we felt it was necessary to bring on an equity expert in the form of an Equity and Inclusion Coordinator to lead this important initiative.”

Other equity focused additions to the 2021 budget include the implementation of body cameras by the Police Department. This new technology will cost $195,264 for the purchase of the equipment, as well as a three year warranty and “cloud” storage.

The Police Department will also be adding an embedded social worker, which will be shared equally with the City of Edina, to aid in connecting residents with needed resources.

“The Richfield Police Department recently made two significant advancements regarding our commitment to equity: the implementation of an embedded social worker and a body worn camera program,” reported Police Chief Jay Henthorne. “Our embedded social worker is able to pair individuals with various assistance/support services, improve outcomes, and reduce the need for continued law enforcement intervention, especially in incidents involving mental health crises. Body cameras will promote transparency and ensure high-quality services.”

As a fully-developed city, the only way to reduce the property tax burden on single-family home owners is through strategic redevelopment. The Community Development Department has worked diligently over the past several decades to build a robust commercial and multi-family property tax base that meets the needs of the community. Recently, more than $337.5 million in redevelopment projects have been completed, under construction or approved.

In the long run, this increased tax capacity will place the City of Richfield on stronger financial ground, but it also has other implications in the short term, specifically, a reduction in Local Government Aid.

Local Government Aid, or LGA, is aid from the State of Minnesota intended to be used for property tax relief. The Department of Revenue certifies LGA for cities based on current LGA statutes, including any changes enacted during the most recent legislative session. For 2021, the state will be reducing Richfield’s allotment of LGA by approximately $364,000.

Throughout the budget process, the city has sought to find as much cost savings as possible, including postponing a number of infrastructure projects. The most notable of these projects is the reconstruction of 65th Street. The $9 million project was set to break ground this year, but in an effort to reduce the impact on the city’s annual tax levy and future debt service, the project was postponed until at least 2022.

To reduce the need to hire additional staff during the pandemic and keep costs low, current staff has taken on additional responsibilities, learned new skills and exhibited a high-level of flexibility in their day-to-day service to residents. Recreation supervisors became videographers, Wood Lake Nature Center naturalists became park ambassadors and motor vehicle clerks became Spanish-language translators.

“Richfield residents have to make tough financial decision in their daily lives and as a city we do not want to place another burden on them by having their property taxes increase at an unfair rate,” asserted Rodriguez. “We believe that the 2021 budget and tax levy allows us to invest in initiatives that will benefit residents in both the near and long term, while still being fiscally responsible.”

This press release was produced by the City of Richfield. The views expressed here are the author’s own.