Annual budget season has kicked off for the city of Brainerd.
The Brainerd City Council on Monday held its first meeting on the 2012 proposed budget. Because it was advertised as a workshop, no action was taken by council members.
The proposed budget was presented by staff, Council President Mary Koep and Personnel and Finance Committee Chairwoman Bonnie Cumberland. The council members worked with staff on preparing the 2012 budget.
In 2011, the council adopted a working fund budget of $8,367,042, of which $4,055,836 was covered by a tax levy. There are slight differences for the proposed 2012 budgets, as staff proposes a working fund budget of $8,394,184 and Koep and Cumberland proposed a 2012 budget of $8,389,184. The difference was Koep and Cumberland eliminated a $5,000 request from Brainerd Lakes Regional Airport and proposed a 5 percent reduction in mayor and council salaries, putting the $2,800 savings into the Beautify Brainerd Fund.
There also are differences within the projected levy amount, as staff and Cumberland proposing a levy of $4,205,836 and Koep proposed a 2012 levy of $4,055,836 — which matches the 2011 tax levy.
The difference in the tax levy is an additional $150,000 proposed by staff and Cumberland to go toward debt service. All proposals included a $198,300 surplus in the working funds that would go toward debt service.
Finance Director Theresa Goble said the city has received no information about what tax rate would result from the proposed levies. The city also doesn’t know what the value of a mill levy will be, Goble said, though she estimated they would go down because property values have decreased.
The proposed addition of $150,000 for debt service garnered a lively discussion among council members.
Council member Bob Olson argued in favor of the additional $150,000 levy for debt service, saying the city can’t be raiding other funds to pay the deficit.
“There aren’t any more surpluses. We’ve had it,” Olson said.
Just because the $150,000 is included in the preliminary levy doesn’t mean the council needs to keep it in when it adopts its final budget and levy in December. Olson noted once a preliminary levy is set in September it can be lowered but not raised.
“And I can see headlines, ‘Olson recommending a tax increase.’ So what, I’ll stick by it. I don’t like it but it’s got to be done, people. We owe the money. We cant get away from it,” Olson said.
Koep said her proposal includes enough funds to meet the city’s debt obligations and doesn’t require any other changes to other funds to meet the city’s bottom line.
“All it does is add another levy of $150,000,” Koep responded.
Olson and Koep continued to discuss the issue further, until council member Lucy Nesheim interrupted with a motion to adjourn, which was seconded by another council member and accepted by Koep.
Prior to that point, the council had touched on a number of issues within the proposed 2012 budget.
Dues of about $24,000 to the Coalition of Greater Minnesota Cities provided a split among council members, with some saying the city could do without it and others saying the group is a valuable asset in lobbying the Legislature on the city’s behalf for local government aid.
City Administrator Dan Vogt said there’s value in what the coalition does since the city would have to greatly cut services or double its taxes if it lost local government aid.
Koep said the city could do without the coalition, and instead push the League of Minnesota Cities for more lobbying on the city’s behalf. She suggested the city look into whether the coalition would offer an associate membership for half the price.
Nesheim said the city needed the coalition’s services more than ever and that it was the last expenditure she would cut from the budget. Wallin agreed, noting the city gets about $4 million in local government aid.
“Where would we get that except by taxing the heck out of our residents?” Wallin said.
Council member Kevin Goedker said if the Legislature already is going to be cutting local government aid the city shouldn’t be spending money to have someone lobby for it. Council member Bob Olson said it’s the legislators who set local government aid and the city could lobby them.
Council member Dale Parks said because the coalition pushes for the city, the city should at least stay with the coalition for one more year.
The council also discussed funding for the Brainerd Lakes Area Economic Development Corp., or at least a restructuring so Brainerd residents wouldn’t be paying a “lion’s share,” as Cumberland put it.
Nesheim said BLAEDC has been a big contributor to economic development in the city. Koep said the city’s unemployment numbers didn’t bear that out.
The council also discussed reducing the park department’s budget, but didn’t get into specifics. Goedker said he couldn’t see cutting programs that sustain themselves, but Koep said the idea would be to look at the department in general.
There was brief discussion on combining the maintenance arms of the parks and street departments. Council member Kelly Bevans said it would be a tremendous opportunity to have employees where they are needed.
“It’s not just a money thing, it’s the best utilization of manpower,” Bevans said.
Vogt noted that the council only sets the parks department’s budget and a decision to combine maintenance would be up to the parks department.
On the revenue side, Olson pointed out about $50,000 in increases that could be included in the budget and Cumberland questioned whether some specialty services provided by the fire department, such as the hazardous materials team, could be sources of revenue.
Goble also pointed to a few proposed adjustments, including a 9.5 percent increase in health insurance, no additions to staffing, $5,000 for the Fourth of July Celebration, $135,000 miscellaneous special projects fund and a decrease in the amount the city gives for the Main Street coordinator position.
Several of the items discussed Monday are expected to be on the council’s Sept. 6 agenda.
MATT ERICKSON may be reached at firstname.lastname@example.org or 855-5857.