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Brainerd City Council: City approves 10 percent preliminary levy increase

A preliminary levy increase of 10 percent was approved by the Brainerd City Council.

At a council meeting Monday, the group made the move with the goal to reduce it more before year's end.

The preliminary tax levy approved is $4,898,845, with $116,550 for the Housing and Redevelopment Authority.

Voting against the move were city council members Kelly Bevans and Mary Koep, both saying the increase should be smaller.

The final levy adopted in December can be lower than the preliminary 10 percent increase, but it cannot be higher.

The 2014 levy increase was 12.7 percent.

At Monday's meeting, there was some disagreement on the right amount to set the preliminary levy at.

Bevans suggested an 8 percent increase, which would mean about an additional $200,000 in cuts to the proposed budget.

"It doesn't address every question. ... It just says 'This is where we say this is going to be enough,'" he said.

Setting the preliminary levy at 8 percent forces the council and staff to "pound" out cuts in the budget moving forward, he said.

City council member Dave Pritschet said he'd be comfortable with 10 to 12 percent, noting that it can always be decreased later.

City council member Chip Borkenhagen said he'd be comfortable with a 5 percent increase.

Koep said the increase shouldn't go above 4 percent.

City council president Dale Parks said he doesn't agree with the 10 percent, but "the city needs to start some place."

Parks noted that he thinks they can cut another 2 or 3 percent.

City council member Gary Scheeler said the council did a lot of "hacking" to the proposed budget and did a good job bringing the levy increase down from the projected 30 percent increase to the preliminary one presented Monday.

City council member Dolly Matten added, "It's easy to say you want a zero percent increase. I want a zero increase. I don't want to pay any more money. I'm a taxpayer as well."

However, she continued, there are certain expenses that the city can't avoid.

"There are expenses we are choosing to ignore and we can't do it any more," she said.

At a special city council meeting last week, council named about $1 million in cuts and adjustments to the proposed budget.

That still comes up short, with a total projected shortfall of about $1.3 million if everything is kept in the proposed budget. That would equate to about a 30 percent increase in the levy if the council cut nothing. For every $50,000 cut, it's about a 1 percent decrease to the levy.

Among the items to be removed from the proposed budget include: credit card equipment and INCODE update at $25,000, the comprehensive plan at $75,000, grant matching money of $14,500, strategic initiatives of $100,000, $50,000 for phase two of riverwalk, cut all street and sewer capital requests for $184,000, cut $20,000 for the newsletter and website, and the park department's request for a Taurus, mower, hockey rink and security cameras.

Other budget adjustments include:

• Not approving a 2 percent funding increase to the airport at $3,110.

• Not transferring campground profit to Park Dedication fund; instead use it to support general operations of Park and Recreation Department. Estimated $20,000 decrease.

• Reducing the amount for the capital improvement project (CIP) bond capital by $150,000.

In other city council news:

Approved the sale of $6.7 million in electric utility revenue bonds to fund the purchase of the hydrodam to Northland Securities and Dougherty and Company at the true interest rate of 3.07 percent.

That's adds up to about $100,000 a year in interest, at a net interest cost of $1,645,992.

City council member Mary Koep said it's important people realize the net interest cost.

City council member Gary Scheeler said the dam will produce $1.3 million a year.

Koep shot back that that "hasn't been proven yet."

Voting against the sale as Koep.

Brainerd Public Utilities (BPU) received a one notch downgrade in its rating from A3 to Baa1. The main reason for the downgrade was the lack of cash reserves due to not adjusting rates quickly enough to correspond with the increases in cost of buying power from Minnesota Power, city officials said.

The city's bond rating was also downgrades a notch from Aa3 to A1. That's because of the strong ties between the city and BPU, as well as the weak demographic profile of the city, city officials said.

Held a public hearing and final reading of a proposed ordinance that would allow for possible building permit denial if a resident has had enforcement actions taken against them. Those permit requests would go before the council for approval or denial.

No one spoke at the public hearing.

Set a public hearing to consider special assessments for 2014 for 7:30 p.m. Oct. 20 at city hall. The improvement projects include: Willow Street from South Seventh to Southeast 13th streets; 10th Avenue Northeast from Highway 25 to Highway 210; South Fifth Street from Laurel to Front streets; 10th and 11th avenues Northeast from J to L streets; J and L streets Northeast from 10th and 11th avenues; downtown snow removal and special services district; 2014 nuisance abatements and citations.

Approved the disposal of a transit bus that has been out of service since last spring when the frame broke. Since, parts have been salvaged and will be sold to the junkyard once all parts are taken off.

Approved a request from the police department to buy a community service officer (CSO) truck and equipment at a cost not to exceed $30,000. The sales of other police vehicles will help fund the purchase.

Accepted with regret the resignation of CSO Lauren Taylor, and approved hiring a replacement.

Accepted with regret the resignation of police department records management technician and CSO Caitlin Robinson.

Approved a resolution of support for a Conservation Partners Legacy grant submittal by the city to fund vegetative restoration at Rotary Riverside Park. The proposal is to restore about 13 acres with native grasses and wildflowers at an estimated cost of $37,000. The grant requires a 10 percent match, which the Rotary will fund.

Appointed a special committee, tasked to discuss with residents information on the CIP bond and Local Option Sales Tax (LOST) questions, which will be on the November ballot. On the committee are Borkenhagen, Scheeler and Pritschet.

Adjourned into closed session to discuss the IAFF Union grievance settlement.

JESSIE PERRINE may be reached at jessie.perrine@brainerddispatch.com or 855-5859. Follow me on Twitter at www.twitter.com/brainerdnews.

Jessie Perrine
Jessie covers the Brainerd City Council and the Brainerd School Board. Born and raised in southern Minnesota, Jessie attended Winona State University, where she majored in journalism with a minor in women and gender studies. She worked at the Winona Daily News, Tomah Journal and the La Crosse Tribune before starting at the Dispatch in 2012.
(218) 855-5859
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