$1.3 million shortfall projected in 2015 Brainerd budget
There's a projected shortfall of about $1.3 million in the city's 2015 preliminary working funds budget.
At a special Brainerd City Council meeting Monday, the group heard the first round of preliminary numbers as staff works to mold the city's budget for next year.
If city wants to keep levy the same as 2014, they need to cut $1.3 million from the budget, said Finance Director Connie Hillman.
"Or, if you want to fund everything in budget, thats how much it needs to be raised," she said.
Noting that the latter was likely not the desired action, Hillman posed the question: "How do you want us to balance the budget?"
The council has until Sept. 30 to adopt a preliminary levy. The final levy adopted in December can be lower than the voted on preliminary levy, but it cannot be higher.
Monday's meeting was only to discuss the future budget.
The levy that was adopted last year for 2014 was $4,453,486.
The proposed preliminary debt levy is $2.02 million. That's a $120,000 increase from 2014.
Hillman said the council has a lot of decisions to make before Sept. 30. Specifically in regard to the budgets of the general fund, police and fire funds, the parks fund, and the street and sewer fund. Those are the funds which are supported primarily with the tax levy.
Council member Mary Koep said she knows certain things can't be reduced, but there are several items that can be altered.
Koep said she's been looking at things that could be reduced or cut, and suggested everyone else does the same.
"We've got a lot of work to do on this," she said.
Council member Dolly Matten requested staff come up with creative ideas to fund their requests, rather than just tasking the council to cut.
Council member Dave Pritschet agreed, saying staff should prioritization their requests.
"I could very well cut something that (a staff member) says is needed," he said.
Council President Dale Parks said he wanted to give the council more time to comb through the budget items before telling staff what to cut or alter.
The next budget work session will be held in September.
The proposed working funds budget includes:
• An estimated 20 percent increase in health insurance premiums, or about $100,000. The actual rate won't be known until later this year.
• A $27,000 increase in the amount budgeted for the Public Employees' Retirement Association.
• A $17,000 increase in budget amount for property, liability and auto insurance.
• A $40,000 increase in budgeted amount for the workers compensation premium.
• A new IT employee, along with salary allocations updated to reflect where employees spend their time.
• Removed from the budget was $22,000 for the Coalition of Greater Minnesota Cities dues.
• An increase of $100,000 for union and non-union contract settlements.
• A revenue increase of $40,000 for other taxes and penalties
• An overall increase of about $10,000 in grants and aids.
The "other funds" budget for 2015:
• Parking fund: A projected deficit of $5,300. This means the city would be using some of its fund balance. At the end of 2013, the fund balance was at $13,600. The city may want to consider increasing the rental rate for leased parking spots, Hillman said.
A 5-10 percent increase in fees would cover the cost, said City Administrator Patrick Wussow.
• Sanitary sewer: A projected surplus of $19,600. But, per the preliminary Engineering Department's 2015 plan, $400,000 would come from this fund for work. But the fund balance is only $375,000 as of December 2013. That means the city does not have enough funds to pay for the projects, Hillman said.
In addition, the city needs to make up for not transferring funds to the debt service fund to pay for the utility issue in 2012. Some options would be to postpone some projects, bond for the projects, or increase rates.
• Storm sewer: Similar to the sanitary sewer fund, there's a projected surplus of $8,500, and the proposed projects are about $150,000.
• EDA: Included is a request from the Initiative Foundation for $5,000, as well as from the Brainerd Lakes Area Economic Development Corporation for a 2 percent increase of $76,000. The Greater Minnesota Partnership dues of $1,500, which is a $500 increase.
The proposed capital items:
• There is $250,000 in the proposed budget for the capital improvement bonds, which residents will vote on in November if they want to the city to pursue. Proposed is: If the bond question passes, that the levy could be lowered by $150,000. If the question fails, proposed is to add $100,000 debt levy to the capital item in order to start funding for some of the projects.
The city must make the required $2.3 million in debt payments, but there is not enough money in the debt service funds. It's estimated the city will fall short about $1.154 million for the February 2015 payments.
That means the city will have to borrow from other funds to make the payments, Hillman said.
In other council news:
Approved a recommendation from the Transit Committee to keep St. Francis School monthly bus fees at $60 per child for the 2014-15 school year. The vote also means the school must allow Reichert Bus to submit a bid on the services.
The fee structure will be reviewed over the next year by officials.
Since 2008, a handful of students have ridden the city/county's bus system to shuttle them from the outlying areas in the county to school. It was recently discovered that students who rode every day were being charged at a rate of $1.50 per ride, instead of the normal $2.50.
The school requested the same rate to help families who depend on that $60 rate, as well as to discuss future fees.
The Brainerd and Crow Wing County Transportation Committees met together to talk about the issue Aug. 20.
Officials learned that former county transit coordinator negotiated the fares with the school based on the committee's directions.
St. Francis School Principal Deb Euteneuer said that Reichert Bus is putting a bid together, but it will be more than the school can afford.
The Transportation Committee's recommendation was not unanimous, with nine in favor and four against.