Grand Marais city councilors unanimously approved a 2011 budget that includes a 3 percent levy increase at their Dec. 8 meeting.
Although council has until the end of December to approve the budget for the following year, City Administrator Mike Roth said he was confident everything that could be done to fine-tune the budget had been done. “We’re basically done working on it; there’s nothing else the staff needs to do,” Roth said in recommending approval of the $1.8 million spending plan. “I feel we’re in a good spot.”
City staff and council began working on the budget in the spring. The process included workshop sessions as well as meetings with the department heads, all of which led to approval of a preliminary budget with a maximum levy increase of 3 percent in September. The final numbers have changed very little since then.
Despite all the planning and meetings, however, there are still some unknowns in next year’s budget. Roth presented and reviewed a list of variables and “risk factors” that were taken into account as the budget took shape. Theyinclude:
. State aid, which was figured into the budget based on the current year’s allotment but may still be reduced.
. Wages and health insurance costs for union workers, whose contract expires at the end of 2010. No negotiations have been scheduled, but Roth said the city is proposing no increase in wages. Health insurance increases will raise the personnel budget by about 7 percent.
. Rec Park income makes Grand Marais unique, and in 2011 that income is estimated at $662,550. But Roth said he and Parks Manager Dave Tersteeg are pretty sure that amount has been undershot “by a lot.” Park income has been steadily increasing since 2005, and this year’s income stands at $721,000. Even if a bad year due to weather, high gas prices or other factors occurs and decreases projected revenue by $50,000, Roth said the budget would still be met.
. The municipal swimming pool and golf course are both expected to continue losing money, but how much is anybody’s guess. Roth said it’s known that the aging pool facility will cost money to keep open and a new boiler may be needed at a cost of about $20,000 ($6,000 is included in the budget for capital improvements); the golf course has been experiencing consistent losses of at least $10,000 annually, with a recent maximum loss of $30,000 in 2007 and ’08. A $23,000 loss is predicted for 2011.
. A change in the wholesale electric cost structure will be favorable for the city, which benefits from having excess power available in the summer, and a need to purchase more in the winter which is the opposite of other cities in the SMMPA system. Roth said a 5 percent increase in wholesale costs will result in an $83,000 revenue increase for city PUC customers, who will see no rate increase next year.
. There are no major projects on the capital improvements priorities list, but the 2011 budget sets aside $53,000 for contingencies and any projects that may become necessary or earmarked by the new council.
Overall, the 2011 budget as approved calls for a property tax levy of $825,997; General Fund spending of $1,825,997 (a 3 percent increase); and a general revenue levy of $650,879.
In other business:
. Mayor Sue Hakes said she was satisfied with the budget, but still nervous about the possible loss of state aid. She also asked about the disappearance of the orange flags at the highway crosswalk, and was informed the flags had been taken inside for the winter. Hakes said she hopes to see the flag program expanded to other busy intersections next year. . The mayor said she has been receiving numerous calls about icy sidewalks, and has spoken with the Street Department in an effort to keep awareness up. “I know it’s a real challenge, and they’re working on it,” Hakes said. . Councilor and Public Utilities Commissioner Tim Kennedy reported that there will be no increase in the electric rates next year, but a 1.9 percent increase is “necessary” in the water rates. . Councilor and park board member Bill Lenz reported that the park board has approved new rates for next year, and expressed concern about possible high costs associated with re-opening the pool. . Councilor and library board member Kay Costello reported that the library board has plans to meet with the architect to review preliminary plans for the building expansion. Costello also said she participated in a phone survey conducted by AEOA about homelessness in Cook County. . Council approved a request presented by Maggie Barnard of the Cook County Events and Visitors Bureau to support the Winter Festival set for Feb. 4-13 with an in-kind contribution of $500 in the form of labor and equipment use to haul snow and prepare an area in Harbor Park for snow sculpting.
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