The Grand Marais Area Recreation Park and Campground has just had its best two years ever, bringing in enough revenue last year to offset a forecasted 2.94 percent property tax levy increase. City councilors used the added income, which is projected to reach $771,983 next year, to maintain current tax levels in 2014.
Grand Marais taxpayers got some good news Dec. 11 when the city council decided to make minor adjustments to the preliminary 2014 budget, resulting in a zero percent levy increase.
City Administrator Mike Roth explained that by increasing the projected revenue income for the city’s Rec Park in next year’s budget, the 2.94 percent property tax levy increase approved in September could be offset.
Roth said it was a pretty safe assumption that the Rec Park’s campground would bring in more than the $757,109 that was penciled in for 2014. “We’ve just had the two best years ever at the Rec Park,” Roth said, adding that the modest increases in campground and user fees the past few years have not affected visitation. Why not use the added income to write down property taxes, he asked.
Councilors agreed with the proposal. Tim Kennedy said he thought it was a good idea to reduce the levy back to the 2013 level, especially if the move didn’t jeopardize any long-term projects or planned capital improvement plans.
“It’s a no-brainer,” he said. “We should pass the benefits of operating the campground and liquor store on to the taxpayers when we can – that’s why we operate these enterprise funds.”
Roth said that in order to achieve the zero percent increase, it would be necessary to raise the Rec Park’s expected revenue income about $15,000, to $771,983. He noted that the amount budgeted from the Rec Park in 2012 was beaten “handily,” and the park’s 2013 income has also exceeded expectations. So not only is usage up and the campground in demand more than ever, modest rate increases have also contributed positively to the bottom line during that period. And as councilor and park board member Bill Lenz reported, the park board has approved a rate structure for next year reflecting about a 1.5 percent increase.
Also going in the city’s favor, Roth pointed out, is the fact that all of the bond payments for the next 20 years have recently been refinanced, resulting in lower annual payments.
With council’s decision to reconfigure the 2014 spending plan, the property tax levy remains at the current $824,152.44.
The revised 2014 budget became official Dec. 18 when council approved a resolution adopting the final levy and budget.
Grand Marais’s preliminary budget adopted by council in September called for a maximum 2.94 percent property tax levy increase. However, state statute allows taxing entities to reduce – but not raise – that amount before final adoption at year’s end.
In other business:
. Councilors and members of the city’s Public Utilities Commission heard a presentation and update by engineering consultant Mark Spurr regarding a proposal to connect City Hall to a district heating system. Spurr said he and a local biomass committee have been working steadily on the engineering aspects of the estimated $10 million plan which began about four years ago, and they are now poised to solicit proposals from contractors. Those proposals (RFPs) are expected to be put out in early January with a due date a month later. It is then, said Spurr, that planners will have a better idea of how much the actual cost will be.
To date 18 downtown customers have expressed interest in the project, and that number “will be an important piece of the puzzle” in determining the plan’s feasibility, said Spurr.
While councilors asked questions and expressed reservations about the biomass proposal, no decision was made about the city’s participation. Committee member George Wilkes said an ongoing public information campaign is now under way, and council will not be asked to make a decision until sometime in February, when more details are known.
. Mary Sanders spoke during the public forum portion of the meeting, saying that she had some serious questions about the environmental and economic impacts of the biomass proposal, and urged councilors to look into the matter carefully and thoroughly before reaching a decision. Sanders said she and her husband Doug were willing to assist in such a fact-finding investigation.
. Councilors gave their support of the “Moving Matters” Active Living program, and said the city would continue its participation in the policy meetings. City Administrator Roth said it is to the city’s benefit to take part in the planning, and perhaps the city can gain control over state rights of way and other areas that it doesn’t have now. Councilors will attend the committee meetings as they can, and the meetings will be posted in accordance with open meeting laws.
. YMCA Director Emily Marshall gave a mostly positive update on the building’s progress, and said everything was on target for the Jan. 3 opening. She said a city council representative was still needed on the Y’s board, and Jan Sivertson volunteered.
• Councilor and Economic Development Authority (EDA) board member Bob Spry reported that due to the agency’s financial straits, three of the four employees at the Superior National Golf Course have been laid off for the winter, and a contract with Community Fundraising Solutions will not be renewed. Noting that it was the first time ever for such drastic measures, Spry said the golf course and housing program are costing the EDA “quite a bit of money…and we had to do something. It was just a bad year.”
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