With an eye toward reducing the city’s proposed 2016 tax levy, Grand Marais city councilors met Nov. 13 to make some adjustments in next year’s budget, with the result being a drop from a 12.2 percent maximum increase to a lower figure of a 6.87 percent increase.
The new draft budget sets the property tax levy at $880,746–down from the original $924,767 amount set in September–and calls for expected general fund spending to amount to $1.9 million with revenues totaling $700,347. Councilors have until the end of the year to finalize the budget, and may be able to make even further cuts before then.
City Administrator Mike Roth reviewed the proposed budget and presented the latest revision. The key changes were adjustments downward in administrative expenses due to benefit changes; a lower allocation to the library of $160,564 (an 8.2 percent increase rather than a previously approved 16 percent increase); and an increase in anticipated income from the Rec Park (up from an original $835,000 to $860,000).
There was some discussion about adjusting the numbers even more to reflect a lower (or even no) tax increase with further cuts or increased use of the city’s reserves, but in the end council decided the added revenues would be needed to fund future projects, some of which Roth said are “expensive and necessary… and cannot be avoided forever.”
Those projects include a liquor store study; purchase of an electric service truck, digger and derrick; construction of a public works facility and relocation of the existing structures in the Rec Park; Highway 61 safety improvements project; reconstruction of West First Street and Fifth Avenue; and possible improvement and/or replacement of the municipal building which houses City Hall and the municipal liquor store.
Roth said those projects will obviously not all be done within the next five, 10, or even 20 years, but now is the time for council to begin considering how they – and any currently unforeseen and thus unscheduled projects – will be paid for and to start putting away some of that money.
There was general agreement with that sentiment.
Councilor Tim Kennedy – the lone veteran on the council – observed that the levy has remained flat since 2011, but that trend is simply not sustainable. “We have put off levy increases in the past because of the soft economy, but things are better now than they have been,” he commented. “And we need to figure out how to do things, and do them responsibly.”
Councilor Tracy Benson agreed, noting that now is the time to start banking some of the funding that will be needed for future projects in order to avoid a larger tax increase down the road when the projects happen. “They [projects] may not come to fruition immediately, but when they do we will have money set aside,” she said.
Mayor Jay Arrowsmith DeCoux echoed those comments, saying he was in favor of a “modest” levy increase now to avoid a spike in taxes in the future. Councilor David Mills said he wouldn’t call a 7 percent tax increase “modest,” but on the other hand he wasn’t comfortable with going below 6.8 percent. “We need something for planning,” he said.
Roth said he was comfortable with the tentative 6.87 percent increase, which should allow the city to proceed on schedule with its planned improvements at the Rec Park as well as stay on track with its financial planning for upcoming projects. Significantly, too, Roth pointed out that the city hasn’t had to consider service cuts at all, and “we certainly don’t want to get to that position.”
Council voted to use the lower maximum increase number of 6.87 percent in future budget talks, and in the meantime will explore opportunities for even further reductions next year and beyond. Specifically, councilors discussed options for cutting construction costs of a proposed public works facility, which is currently set at $3.7 million and represents the most expensive item on the capital improvements project list.
In other business
. Council voted 3-1 to contribute up to $17,000 to the Cook County Tennis Association for the rebuilding of two tennis courts at the high school campus. Representatives Gene Glader and Frankie Jarchow joined the discussion and said the exact amount needed will not be known until all of the $133,300 project’s details are finalized, specifically how much and whether the group will receive a grant from the Lloyd K. Johnson Foundation, which will not be announced until Dec. 22. Benson cast the lone no vote, saying it was nothing personal against the tennis association, but council needs to come up with a more fair process when considering requests from organizations.
. Council acted to correct a clerical oversight and removed former liquor store manager Pat Hennessey’s name from the list of city signatories at Security State Bank.
. Council approved a request from the Chamber of Commerce allowing a fireworks display at 5:30 p.m. Nov. 27 as part of the Christmas parade and holiday celebration. The fireworks will be launched from the usual location in the Rec Park by Bob Spry, the official pyrotechnician. The Lions Club’s insurance will cover the event.
. Council voted to increase the benefit amount for the city’s volunteer firefighters from $1,250 per year of service to $1,500 per year of service upon retirement after reviewing the results of an analysis of the Public Employees Retirement Account (PERA) council requested earlier this year. There is no increase in cost to the city at this time, although the city’s required contributions to the account may go up in the future.
Leave a Reply