Posted: 11/27/02

City of FL spending will go up 4%

Cliff Buchan
News Editor

City spending is projected to grow by 4 percent in 2003 under a proposed budget and tax plan that is being prepared for Forest Lake citizens. The public can comment on the cityís proposed taxing and spending plans when Forest Lake City Council has its Truth in Taxation public hearing at 7 p.m., Monday, Dec. 2 at city hall.

Under the preliminary plan now being considered, the city is moving toward a new tax levy that is just under $100,000 more than the tax levy for 2002.

The city is proposing a 2003 property tax levy of $3,730,226. for the city share of taxes. For 2002, the city levied property taxes of $3,686,816. The proposed increase for 2003 is 1.16 percent.

The property taxes will help support a proposed 2003 budget of $8.35 million. The 2002 actual budget was $8.02 million.

City Administrator Chip Robinson said the city council is moving cautiously with spending and taxing plans for 2003 because of uncertainty in revenues the city may receive from the state next year.

The new budget is built based on a countywide estimated 10 percent growth in market value. In the case of Forest Lake homeowners where the market value increase is projected at 10 percent, taxpayers should see only modest tax increases for the city share of the property tax bill, Robinson said.

ìFor homes with a 10 percent market value increase, the taxes for the local share are going to remain level or the same (as in 2002),î Robinson said.

Conservative moves

With the state facing a potential budget deficit of $3 billion, the administrator said the cityís plan will be conservative for 2003.

During its budget planning sessions in August, council enacted a plan that will put in place local budget cutting steps should legislative action this winter and spring mean a loss of aid.

Faced by the huge budget deficit, Robinson says he is expecting some state attention to local government aid. Under the city plan now being reviewed, the state is expected to provide $321,915 in local government aid next year.

The contingency plan addressed a 50 percent loss of LGA, Robinson said. ìIf it is more, weíll have to cut deeper,î he said.

Should the city lose $150,000 in state aid, city departments are prepared to trim their budgets. The city will also freeze any decisions to hire new staff and hold off on capital equipment purchases in the first half of 2003.

That directly impacts the police department where spending is projected to increase from $940,000 in 2002 to $1,036,419 next year. If expected revenue is cut this winter, the police force may scale back plans to buy two additional cars. The hiring of new officers will be pushed back next year, as well.

Budget Reserves

For the first time in the past six years, the new city budget will no longer build in funds for the general fund reserve. Robinson says council action during the past half dozen years has accomplished its goal of producing a general fund surplus of $2.5 million.

That is the amount recommended by city auditors and fiscal agents, Robinson said. The general fund reserves are recommended, he said, to enable the city to operate in the event of an emergency or changes in cash flow aid payments.

The city has gradually been building its general fund reserve which was in deficit status in 1995, Robinson said.

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