NORTH MANKATO — The city property tax levy would increase 3.4 percent in 2011 under a budget proposal presented to the North Mankato City Council Monday night by City Administrator Wendell Sande and Finance Director Steve Mork.

Unless the council calls for a reduction in the levy at a workshop a week from today, the $5 million levy will be the upper limit for local property tax revenue as the 2011 budget is refined in the next three months. Council members didn’t take any action on the proposed budget  Monday night and offered little comment on whether the administration plan was larger than they preferred.

The proposed budget would freeze non-union employee salaries for the second straight year. And with the expiration of the unionized police force’s three-year contract, Sande said the administration would be looking to negotiate a new contract with no pay increases for those employees either.

The budget would add no new positions but also proposes no staff layoffs. That could change depending on whether Minnesota cities face another round of state aid cuts when the 2011 Legislature tackles a projected $6 billion budget shortfall, Sande said.

State aid for North Mankato will fall nearly $229,000 for 2011 under current law, and lawmakers and the next governor are likely to consider additional cuts as they tackle the large pool of red ink early next year.

The council and city staff noted that Mankato and Blue Earth County, and possibly Nicollet County, are still budgeting for employee pay increases.

“It appears we’re the only ones freezing wages,” Mayor Gary Zellmer said.

But both Sande and Mork noted that layoffs are planned in Mankato, and that North Mankato workers prefer a freeze to work force cuts.

“Share the pain, basically,” Sande said.

Even with the lid mostly on the city payroll, the general fund budget would increase nearly 5 percent.

The largest addition, however, involves moving the concessions budget at the Caswell Park softball complex into the general fund for the first time.

That adds $80,000 to the expenditure side of the budget, but concessions revenue exceeds that amount, Mork said. Without the accounting change, the general fund budget increase is just under $184,000 — or 3.5 percent.

Nearly 30 percent of that increase would come from the fact that Mork has unofficially  announced his retirement for September of 2011. After 14 years as finance director, Mork is looking at a pay-out of more than $25,000 in accrued vacation and sick time.

And Sande is proposing that Mork’s successor be hired six months before his retirement, serving as assistant finance director while Mork brings him or her up to speed on city finances. That would add just less than $28,000 to the 2011 city payroll.

About 30 percent of the proposed general fund increase would involve restoration of the city’s traditional seal-coating budget, a street maintenance casualty of the tight budgets North Mankato has faced in recent years. Restoring the program would add $40,000 in seal-coat oil and rock costs.

The budget also anticipates $30,000 in additional insurance costs ranging from employee health to liability insurance.