With an end-of-the-year deadline to adopt a 2015 property tax levy looming, Grand Marais city councilors agreed Dec. 10 to leave the levy number unchanged from this year’s figure. If councilors follow up those sentiments with their official budget and levy resolution on Dec. 31, it will be the third year in a row taxpayers will be assessed a levy of $824,152.
Councilors had proposed setting the levy at $839,783–a 1.9 percent increase over this year–in September when the preliminary levy and budget were adopted. Since then, the numbers have been revised downward, resulting in a tentative $832,059 levy–a 0.96 percent increase–that came under scrutiny Dec. 10. Under state statute, city officials may reduce, but not increase, the proposed levy before final adoption occurs at year-end.
City Administrator Mike Roth presented the revised draft budget and led the discussion following the state-mandated Truth In Taxation hearing. As has been the case in recent years, no members of the public attended the hearing to comment on or question the budget.
The proposed $8,000 reduction in the preliminary levy is the result of an anticipated increase in revenues from the Rec Park and campground. Park Manager Dave Tersteeg presented some information requested by council at a prior meeting detailing the park’s expected income based on rate increases for 2015. Tersteeg said the city could anticipate an additional $23,700 in income due to the new rates, assuming stable occupancy rates. The new fees will generate revenue that tops $550,000 for nightly fees and $246,000 for monthly fees, outpacing budget projections by $61,000 or 8 percent, Tersteeg said.
In addition, he noted, 2014 was a bad year for the marina because fishing was poor due to the cold water in Lake Superior and thus fuel sales were down 25 percent. However, in 2012 (a “hot” summer) fuel sales topped $54,000, about $14,000 over the budgeted amount. “This is a tough revenue to predict,” Tersteeg said.
Discussion centered on the advisability of adding another $8,000 to the projected revenue from the Rec Park in order to erase the 0.96 percent levy increase in the draft budget and keep the rate unchanged. Tersteeg said the $815,600 income penciled into next year’s spending plan was “still about $55,000 lower than we’re hoping to get.”
Mayor Larry Carlson asked, then, “Can we bring it down to zero?”
Roth said he didn’t believe there was any risk in adding $8,000 to raise the Rec Park’s expected revenue to $824,000 in order to create a zero percent levy increase. “It’s fairly easy to do,” he said. “And we can keep it flat for one more year.” Councilors Bill Lenz and Bob Spry said they’d support such a move.
But Councilor Tim Kennedy said he could see both sides of the argument. “I’m comfortable with where it is now–we may have some additional needs next year and there will be a use for the surplus,” he said. “It’s good to be conservative and use it as necessary.”
But, he continued, “We’re in a good position either way. A lot of communities would envy where we are.”
The final decision will be made Dec. 31 at council’s last meeting of the year. . At the request of the North Shore Health Care Foundation, council approved a motion to seek bids to conduct a market study in an effort to determine the feasibility of establishing an assisted living facility in Grand Marais. First, however, a scope of work will have to be determined so Roth knows what questions to ask of interested vendors. Speaking for the group, Jay Arrowsmith DeCoux said there were willing volunteers to help with the task. If the project proves to be feasible, the city will then be asked to apply for grant funding on behalf of the Foundation. Arrowsmith DeCoux stressed that the motion does not obligate the city financially, but is just “ground work” to get the fact-finding off the ground. “The problem is not going away,” Arrowsmith DeCoux said of the aging population and lack of proper living facilities.
. Ilena Berg of Cook County Soil & Water gave an overview of last summer’s Lake Superior water monitoring report, which was conducted at four locations along the two-mile coastal area of the city. Overall, said Berg, the program had many successes in its first year, and it is hoped funding can be found to continue the research. “Things are good – you should not be concerned,” Berg said in response to a question about levels of e. coli and other contaminants found in the water.
. Emily Marshall of the Cook County YMCA gave a brief update and end-of-year report on the new facility. Marshall said there “was a lot to celebrate” with membership and visitation exceeding firstyear expectations, with future plans to include a licensed day care center, increased out of school time programming, mentoring and tutoring, increased presence in the schools, and increasing corporate memberships with local businesses. Budget-wise, Marshall said she expects that the Y will ask for $100,000 as the city’s contribution again in 2015.
. Council approved payment of $80,000 to KGM Contractors as the result of mediation between the city, the EDA and KGM. Upon payment, the city will receive full and final release from all claims stemming from work done in 2008 and 2010 at the business park. Roth said the amount settled on is what he believes the city owes. The city’s payment will come from funds received from FEMA ($68,000), the construction account ($12,000), and LMCIT (which will contribute $7,500 on the city’s behalf). Mayor Carlson observed that the construction firm had originally sought $350,000, but the city and its legal representatives were able to negotiate the amount downward.
. Roth announced that newly hired library tech Mark Luttinen has resigned and the position needs to be re-hired. In the meantime, Tom Knutson has agreed to return to his former position on a limited basis to help with cataloguing and other assorted duties until staffing is brought up to normal. Council approved the action and the part-time position will be advertised.
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