City begins to fine tune budget

With a preliminary 2010 budget and levy in place, the Brainerd City Council went to work on the final form of the budget in a workshop Tuesday night.

The workshop was opened with a short presentation by Finance Director Theresa Goble, who reviewed the council's Sept. 8 action in setting the preliminary tax levy and budget.

The council approved a preliminary tax levy of $4,262,308, a 7.57 percent or $300,000 increase from the 2009 levy. The estimated tax rate in 2010 is 47.36 percent, an increase from 44.49 percent in 2009.

City staffers on Sept. 8 had recommended the $300,000 levy increase in an effort to reduce debt service funds. The council in a 5-2 vote approved the increase without identifying for what it specifically would be used.

Now that it's set, the preliminary levy can be lowered but not raised before the Dec. 14 final adoption of a levy and budget.

The preliminary budget approved lists $13,318,821 in revenues and $12,961,223 in expenses for 2010. The budget can be changed at any time by council action.

City Administrator Dan Vogt said the 2010 preliminary budget is about $500,000 less than the 2008 actual budget. He noted in 2010 the city is expecting $280,000 less in local government aid, $60,000 less in interest income, $65,000 less in building permits and about $14,000 less in court and parking fines.

"The 2010 budget is really a flat budget for the working funds," Vogt said.

Before the council started its discussion, council President Kevin Goedker allowed members of the public to offer their opinions of the preliminary levy.

Resident Jan Burton didn't support the levy increase. Reading from a prepared statement, she noted lost jobs, home foreclosures, delinquent taxes and unpaid assessments were putting a burden on resident who were paying their taxes.

She didn't want money to go to the debt service on the Brainerd Oaks, Riverside Drive, Beaver Dam and Wright street projects, some of which she said were doomed from the start. She also questioned the necessity of the proposed College Drive reconstruction project.

"Prudent fiscal responsibility and accountability should be your No. 1 priority," Burton said. "To many of us it does not seem to be the case."

Richard Burton, Jan Burton's son, who owns commercial and rental property in Brainerd, said the city has been spending beyond its means without regard to the burden being placed on taxpayers.

Richard Burton called the downtown reconstruction project a mess because it removed parking spaces and will be difficult to plow. He said College Drive also would prove difficult in the winter.

He also said city departments were overstaffed.

"You people have got to make some decisions to nip this in the bud," Richard Burton said.

Brainerd Lakes Chamber Chief Executive Officer Lisa Paxton said the city should look at needs versus wants, as the business community has had to do in tough economic times.

When it came time for council discussion, a few items were changed within the budget.

The council approved $60,000 in unemployment benefits be moved from the parks budget to a general fund expenditure. That money will be used for the three Brainerd Area Civic Center employees who were laid off when Brainerd Amateur Hockey Association took over management of the ice arenas.

A motion was made by council member Bob Olson to reinstate $23,200 into the Brainerd Public Library budget to pay for utilities, but Olson withdrew the motion after council member Mary Koep said the library board unanimously approved a budget without the payment. Olson said if it is learned the library needs the funds he would bring the issue back to the council.

A motion was approved by a 6-1 vote reinstating $8,000 to the Economic Development Authority budget to be used to pay for the city's share of the Main Street program coordinator.

Koep voted against, saying she didn't see the value of the position.

"We're not bringing any new people downtown, we're not bringing in economic development, we're not bringing anything," Koep said. "It's pathetic."

Olson and council member Anne Nelson Fisher said in future years the position could be funded by other means, either public or private, but the $8,000 was needed for this year.

A motion to reinstate $21,000 for dues to be a member of the Coalition of Greater Minnesota Cities was defeated by a 4-3 vote, with council member Koep, Olson, Goedker and Kelly Bevans voting against.

Staff had recommended against cutting the fee to the coalition. Vogt said the coalition fights harder for outstate Minnesota cities than any other organization when it comes to local government aid. He said without the aid, which has been reduced in the past two years, taxes could double.

The council also approved raising rental housing fees by $10,000.

The next budget meeting was set for 6 p.m. on Nov. 9.

Olson said he has prepared several other cuts that he will present at the meeting.

Koep suggested the council look at making up revenue with personnel reductions. She said such reductions could be accomplished by cutting an employees hours by one hour per week or by closing city hall for a half day once per week, among other options.

MATT ERICKSON may be reached at matt.erickson@brainerddispatch.com or 855-5857.