Grand Marais city councilors held their first discussions of the 2012 budget at their July 27 meeting, and in general the outlook is good for city taxpayers.
“We’re in a very good financial position now,” said City Administrator Mike Roth. “We should be able to get by with only a minimal tax increase.” Roth explained that the city’s favorable financial position is due in part to sacrifices the council has made in recent years with such things as staffing levels and postponing equipment purchases and upgrades. Other contributing factors Roth cited included assistance the city has received from Cook County to help offset operating expenses at the municipal swimming pool (which is still losing money); receipt of state aid at the expected level; and the “over-achieving” of both the city’s recreation park and liquor store.
Because the past few budgets have had to be done with uncertainty about the amount of Local Government Aid Grand Marais would receive from the state, Roth said the 2012 budget should be “a breeze” compared to prior years. “It will be much easier, and a relief for a change. We have a reasonable idea of what’s going to happen with the state,” he said.
Coincidentally, the city received its first payment of $48,000 from the state the day of council’s meeting. The second installment of the same amount is usually sent in December. Roth said the state’s plan is for the 2010 amount of aid to be continued in 2011 and 2012, so city planners won’t have to guess next year or adjust their budgets later to make up for a state aid shortfall.
There still remain, however, some areas of uncertainty. Most notably, it is still not known how much the increase in insurance premiums for city employees will be, and council must decide how much it wishes to designate for purchases of equipment, Rec Park improvements identified in the Master Plan, and small-scale utility replacements. There are no major infrastructure replacements scheduled, but Roth said city staff is working with the department heads to clarify the capital needs for the next five to 10 years.
Another unknown is the amount it will now take to operate and maintain the public library, which is in the midst of an expansion project. To address those concerns, Library Director Linda Chappell and Library Board President David Quick spoke to councilors.
Chappell said the board tried to keep its budget request at a zero percent increase as in past years, but due to the unknown variables associated with operating a building that will be twothirds larger, the preliminary budget came in at a 5.1 percent increase. Chappell said it will take a year of using the renovated building before more exact costs can be known for such things as increased staff hours (if necessary), utility and custodial costs, and insurance.
Council approved the preliminary library budget request for $262,218 in operating expenses for next year, and the request will now go to the county commissioners. Under the terms of a joint operating agreement, the city and county each pay half of the library’s expenses.
City staff will continue work on the remainder of the 2012 budget in preparation for Sept. 14, when council must by law approve the preliminary budget and levy.
Leave a Reply