Nothing is off the table after the first workshop concerning the city of Forest Lake’s 2013 budget. City Administrator Aaron Parrish on Thursday, Aug. 16 presented to city council members a proposed budget that includes a property tax levy increase of 2.6 percent.
That number may dwindle before the city’s preliminary budget is certified Sept. 10, for two reasons.
First, Parrish showed the council several areas of new spending that it could choose not to approve.
Second, some council members expressed an interest in making significant further cuts so as to avoid any increase in the levy.
Levy Amount Debated
The council and city staff faced an uphill battle from the start, as the budget will include a debt service payment of approximately $120,500 for a bonding issuance that took place this year to pay for vehicles, heavy equipment and computers.
The next round of funding for police department vehicles, totaling $120,000, will likely fall into the 2013 budget rather than go into a separate bonding package.
Between those items, the budget-makers faced the equivalent of a 3.4 percent levy increase before any other considerations were factored in.
“I think this is a good start,” said Council member Mike Freer. “Frankly, with the extra bonding that we did this year that will have to be paid back next year, I thought the first budget was going to be higher than it was.”
Still, Freer and Council member Susan Young showed interest in fellow Council member Jackie McNamara’s call to keep the levy from rising at all.
“I think it would be interesting for our department heads to go back and crunch the numbers and see if they can make it zero,” McNamara said. “I don’t think that’s asking too much.”
The list that Parrish presented outlining projects new to this year’s budget that could be removed included funds for seasonal staff for administration purposes and information technology upgrades. The expenses totaled nearly $70,000, or less than 1 percent of the budget.
The council expressed general support for most of those items, leaving significant cuts left to be determined on the way to a flat budget.
“Beyond this, outside of picking up 500 bucks here or 300 or 400 bucks there, I think anything different, you’re looking at some additional staffing reductions of some kind or some adjustment in the amount that we’re going to be contributing to streets,” Parrish said.
Talks centered around streets then, with Young proposing that the council consider putting all non-state-aid street improvements on hold for a year or two.
“That would be a very easy place to save a huge part of our general levy and that would get us to a reduced tax,” she said. “I’m sure it’s something that I could support really easily.”
Parrish had recommended the adoption of a franchise fee for road improvements.
In essence, all utility customers would pay a flat monthly fee instead of having a handful of property owners pay large special assessment fees when the streets they own property on are reconstructed. In the new plan, the owners along the rebuilt streets would pay the minimum required assessment of 20 percent.
Young proposed pooling the estimated $675,000 the fee would generate and removing the $350,000 budgeted in the general fund for street work.
Parrish and Public Works Director Mike Tate warned that the city would still be behind schedule if $1 million went to streets every year. That is the amount a streets task force recently concluded is needed annually to maintain just those roads rated acceptable or higher.
And those roads, the city’s best, make up only 54 percent of the system.
“Even at a million dollars a year, 30 years from now we’re still behind the 8-ball because the streets we’re repairing now we’ve got to mill again,” Tate said. “As the community grows, the use is being increased and they’re wearing out faster.”
Mayor Chris Jzohnson instructed Parrish to draw up some further options for taking a significant cut out of the levy, but also cautioned the council against resisting all taxes on principle.
“You don’t want to cut something you deem important just for the sake of saying zero,” he said. “Just for the sake of saying, ‘We did it. We got to zero.’ That can’t be a reason to cut.”
Council member Jim DuFour advocated giving dollars to the city departments when there is a true need, specifically to public works.
“When we had that Community Conversation series, most people that I listened to or talked to were pretty proud of this city and they were like, ‘Yeah, we want to improve it. It’s going to cost us money, but yeah, we want to improve it,’” DuFour said.
“So trying to drop some important things, to me, to get down to zero percent…Yeah, zero would be nice, but we don’t want to reduce entertainment, we don’t want to reduce policing supplies, we need the information technology.”
Building Dept. Plan
Parrish reduced the tax hole from 3.4 percent to 2.6 percent in his proposed budget by a 4.1 decrease in overall expenditures. The drop comes in part due to a wage and salary freeze and also from the elimination of a full-time building official position.
Parrish found support from the majority of the council for a plan to combine the community development and building departments.
It would bring about a savings of $115,000 in 2013. One building official and one building inspector would remain on staff.
Building department revenues have fallen every year since 2006 except for 2008, when a significant amount of building permits were issued following a severe storm.
DuFour opposed the elimination of the second building inspector position.
“What if we have another storm?” he said. “If you have a 30-foot ladder and you only use 20 feet of it, you gonna cut 10 feet off?”
Parrish felt that a fundamental adjustment has occurred regarding building activity.
“We could staff a lot of things for the worst-case scenario, but the reality of it is, the staffing level that was proposed there, from my personal perspective, is a staffing level that is commensurate with the level of activity we’re seeing there,” he said.
Johnson, McNamara and Freer expressed agreement with Parrish on the need for the staffing adjustment.
Fenway Park Loan
On the other hand, the majority of the council disagreed with a proposal by Parrish to budget funds for which to pay off a $1.8 million interdepartmental loan stemming from the construction of Fenway Athletic Park.
The $2.1 million park was designed to be paid off by park dedication funds but those have slowed to a stand-still as little activity has been seen in home construction. After interest, the amount owed is now higher than the original loan taken out of the water and sewer fund.
Parrish estimates it could take 30 years for the remaining balance to be paid by park dedication fees. In the meantime, the parks department would not have access to those fees for other purposes.
“It’s a tough situation for the council,” Parrish said. “You guys inherited a situation where, through the best of intentions, things were going a certain way and things didn’t materialize. The park dedication revenue that people thought was going to be there at the time didn’t materialize and so at some point we have to reconcile that issue.”
DuFour, McNamara and Freer prefer to wait it out.
Budget meetings are planned for tonight, Aug. 23, and next Thursday, Aug. 30 at 6:30 p.m. A fourth meeting, if necessary, will take place the following Thursday.