Cloquet residents opened their proposed 2014 property tax statements to find that county taxes are on the rise, school taxes are set to increase even more, but city taxes remain steady, even dropping in some cases.

Cloquet City Councilors and Mayor Bruce Ahlgren unanimously approved a zero percent levy increase at Tuesday's Council meeting, for the second year in a row.

Although the property tax levy is not increasing, the city's revenues and budget are both increasing (by around 8 percent) for 2014.

Revenues are rising thanks to the state legislature, which reversed the trend of decreasing Local Government Aid (LGA) during its last session. In recent years, city staff had been directed to plan for less LGA than expected, because of the continual reduction or unallotment of LGA by the state. However, because the legislature changed the LGA formula this year and actually added $80 million per year into the fund, Cloquet will receive $2.299 million from LGA, rather than the projected $1.896 million.

City finances will also be helped by the fact that the state also revoked the long-standing practice of requiring cities to pay taxes on items it purchases, including most taxable purchases for equipment and supplies, but not licensed vehicles. City Administrator Brian Fritsinger told councilors the sales tax exemption could save the city up to $120,000 per year.

A number of improvements related to next summer's Highway 33 project are outlined in the budget, included a Pine Tree Plaza frontage road improvement (which would reroute the road across the Super One parking lot past McDonald's) at a cost of $175,000, as well as a cul-de-sac improvement on Second Street, which will allow rear access to the gas station at the corner of Highway 33 and Doddridge Avenue, at a cost of $113,000. Also included is the city's portion of the improvements at that same intersection (split with Carlton County and the Minnesota Department of Transportation), at a cost of $400,000.

Increases in the budget also include a 7.8 percent increase in healthcare costs, as well as a 2 percent increase to salaries, along with any step increases. Police overtime was increased by $35,000 based on the police chief's recommendation.

No city park improvements -- except for repaving the tennis courts at Pinehurst Park -- were included in the budget plans or capital expenditures for next year, explained Fritsinger, because the citizen task force that's been working on a long-term strategic plan for the parks is still putting the finishing touches on its recommendations, which should be heard by the Parks Board within the next few weeks.

The staff report noted that a revised Capital Improvements Plan will likely be discussed in January, after the task force presents its recommendations.

Revenues from the Local Option Sales Tax passed by Cloquet residents last year and implemented in April have been coming in even higher than the state predicted, Fritsinger said. Although those monies could be spent on economic development, infrastructure and parks improvements, there are not yet any concrete plans to spend the funds. However, a number of studies are underway, including housing, law enforcement, parks, marketing and a city building assessment.

"The Council did indicated that even though the expenditure of sales tax monies is not reflected in the budget, if a quality project (s) were identified, the proceeds might be considered," the staff report noted.

Major projects for 2014 (not already mentioned) include the following:

+ Reconstruction of 22nd Street: $936,000

+ Replacement of Sno-Go blower: $130,000

+ Purchase of sewer televising camera: $90,000

+ Allen Street lift station reconstruction: $50,000

+ Police squad car replacements: $65,000

+ Laserfishe and record management system for administration: $100,000

Significant transfers from the General Fund include the following:

+ $50,000 to cover library costs, state mandated

+ $100,000 to continue public facilities planning and future improvements

+ $50,000 to public works reserve for capital equipment purchases

+$250,000 to cover bond debt service for the Business Park

+ $60,000 for a marketing branding study

In other matters Tuesday, Councilors tabled a proposal to amend the city code regarding farmers markets, after being approached by the Carlton County Farmers Market, which is looking for a new home. Two sites in Cloquet -- in the new municipal parking lot downtown or in front of Premiere Theatres -- plus one in Carlton and one in Scanlon are under consideration by the long-time farmers market, which had been operating on the same site in Scanlon since 1983. That property, however, has been sold.

At issue was the city's requirement that transient merchants buy a city license. Although most farmers markets would not have to buy a license -- people selling their own produce or products made from what they grow, such as jams or honey, are exempted under state statute -- the Carlton County Farmers Market has a few vendors that don't sell agricultural products, including pottery and knitted crafts. Vendors selling craft items are required under Section 6.6 of the City Code to obtain a transient merchant license, unless they are selling at a facility such as the Cloquet Armory, which purchases an annual license.

Staff had proposed the city offer the farmers market the option to buy an annual license, members of the farmers market were hoping the city would waive the fee. It is likely the Council will vote to waive the fee at its Dec. 17 meeting.