Any projects the city of Grand Marais undertakes next year will have to be scrutinized, scrutinized, and scrutinized again.
That was the consensus of city councilors April 28 after Finance Director Kim Dunsmoor outlined the existing budget and a preview for 2011 during a special work session. City Administrator Mike Roth was absent.
Dunsmoor explained that Gov. Tim Pawlenty signed a supplemental budget bill into law April 1, and there is an “immediate” $1 billion deficit which the Legislature plans to deal with by making $700 million in cuts in Health & Human Services and K-12 education. The state is also planning on receiving a $400 million increase in federal funding for Medicaid, but it won’t be known until June if that money will actually be received. If the federal government does not come through with those funds, said Dunsmoor, more cuts to local governments will probably be made.
In the meantime, the impact of the state’s budget woes have already caused a $73,647 decrease in this year’s Local Government Aid (LGA) for Grand Marais, and another unallotment of $33,352 is pending from the Market Value Homestead Credit. The exact amount of that decrease—if any—also will not be known until June.
“Pretty soon, there won’t be anything left to cut,” commented Councilor Tim Kennedy. Dunsmoor agreed, and said that if all of the threatened cuts are made, the city and state will have no choice but to cut more services.
Mayor Sue Hakes said the situation exists because the state has not been collecting enough revenue in recent years. “Sales and real estate taxes are down due to the economy, and that affects everything,” she said.
In anticipation of more cuts from the state, the mayor asked if council should set aside some money designated for future planning and longrange projects such as a shared maintenance facility, marina upgrade, and other needed capital improvement projects. Dunsmoor said a certain amount is already budgeted for in the form of depreciation for equipment such as vehicles, office copiers, computers and turnout gear for the fire department. For instance, she said, the city’s 1997 plow truck may be nearing the end of its useful life, as is the 1978 street sweeper that is “on its last legs.”
In 1990, the fire department had 25 suits of turnout gear, which are becoming outdated and worn out; new suits cost about $2,000 per person to replace. There is also a need to replace radios as they become damaged or worn out, and other equipment such as cracked ladders which need to be replaced. Although council does set aside some funds each year for such expenses, said Dunsmoor, it’s generally not enough and the fund falls a little behind each year.
Theresult of all of the cuts, said Hakes, is that the city has about $13,000, rather than the $46,000 it anticipated, available for projects next year. “We have to be careful with what we approve,” she said. “We can’t just go ahead and do projects that have very little payback such as putting solar panels at the golf course any more.” Hakes, who cast the lone vote against that $107,000 project (and an $8,000 commitment from the city) last month, said she realizes it wouldn’t look good if the city turns down the grant money
” from Iron Range Resources if the grant application is successful, but cautioned about future involvement in such endeavors.
Councilor Jan Sivertson observed that the city needs to take care of the things that are generating income, such as improvements at the Recreation Park including road paving and campsite upgrades. Kennedy said council needs to take a look at pending projects as well, such as installation of a digital speed sign along the highway at the city’s entrance. The electronic sign, estimated at $8,000-$10,000, appears to be in limbo as the state Department of Transportation has not been in recent contact with the city regarding the permit and installation. “We should be looking at these kinds of things and asking, ‘Was it allocated?’” Kennedy said.
Councilor Kay Costello summed up the discussion. “It’s hard to even think about moving ahead with any more projects unless they’re absolutely necessary,” she said.
Council will resume its budget talks during a work session at the end of the month, when more details should be known; work on the 2011 budget will begin in June.
In other business:
• Council adopted a resolution approving a fire ban that prohibits all recreational fires within the city limits, due to the extreme dry conditions. City Attorney Chris Hood said the resolution is consistent with Cook County Sheriff Mark Falk’s edict that bans fires throughout the county. With approval of the city resolution, said Hood, “the rules will be the same everywhere in the county — there should be no question about enforcement.”
The sheriff eased the ban on May 5, allowing campfires in designated areas at the city campground.
• A building permit allowing North House Folk School to move and expand its blacksmith shop was approved. Although the new structure complies with all city zoning requirements, approval by council was necessary because of a condition in the school’s lease with the city, which owns the property.
• Hakes reported that she met with Cook County Commissioner Bob Fenwick, who wanted to confirm that council still supports moving the softball field and municipal pool from the city Rec Park to the proposed Community Center complex near the school. Fenwick is coordinating the effort among community organizations to design the new center. Councilors confirmed that yes, they are still behind the plan.
• Lee Hall was hired as a part-time liquor store clerk to replace Buffy Butz, who has resigned.
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