The Prior Lake City Council gave final approval to the 2025 budget and property tax levy during its Dec. 10 meeting.
Finance Director Cathy Erickson outlined major budget fund categories for the coming year which total $47,515,822. More than $22 million of that figure will be directed to the general fund. Other fund categories that exceed $5 million include debt service, the water fund and the sewer fund.
The city’s tax levy in 2025 will total $19,855,410, which represents a 6.09 percent increase over the previous year. The preliminary levy increase proposed by the city in September was 6.98 percent. The total tax levy approved Dec. 10 was reduced by approximately $167,000, which dropped the tax rate to 6.09 percent.
Decreases in worker’s compensation insurance, property and casualty insurance, health insurance premiums and fees related to prosecution services provided by Scott County totaled $121,000. The new labor agreement with police officers and sergeants is expected to add $139,000 to personnel costs while paid on-call firefighter personnel will increase expenditures by $15,000. The council also approved its local intergovernmental aid agreement with the Shakopee Mdewakanton Sioux Community which will contribute $1.4 million to the city for the next three years, and represents an increase of $200,000 per year when compared to the previous agreement.
The 2025 budget also projects revenue derived from building permits and fees will decrease by $108,000 when compared to 2024. Fewer single family homes and more townhomes are expected to be built in the coming year, which generates less revenue than what was derived from building permits issued in 2024 for 85 single family homes and only two townhomes.