WILLMAR -- City Administrator Michael Schmit is proposing the city not spend $965,477 on equipment and programs in this year's $20.8 million budget to create a reserve to cushion possible state aid cuts down the road.
Schmit said he's not asking for any formal council action, but he is asking council members to recognize the need for long-term planning. The city's $4.6 million Local Government Aid payment in 2009 will be cut by about $270,000.
In 2010, Willmar's LGA will be cut $620,785. The state's 12-month fiscal year began July 1, and the city generally receives its LGA payments in July and December.
Schmit said the city knows its 2009 cut is definite, "but what happens in 2010 when those numbers show up we're not really sure,'' he said.
With the council's blessing, Schmit said, he would try to follow the three-phase budget reduction plan he outlined months ago in anticipation of reduced Local Government Aid payments from the state this year and not make any of these expenditures unless absolutely necessary.
The three-phase plan proposed spending cuts ranging from $501,477 to $731,477 to about $966,000.
"The net effect will be the year-end fund balance, which traditionally carries over to the year after, is going to be a little healthier than what we would normally expect,'' Schmit told the council's Finance Committee Monday evening.
"This whole concept is designed to provide a cushion for any additional LGA cuts that might be coming down the road rather than having to make drastic kinds of cuts and decisions in 2011,'' he said. "That means we need to deal with what we know about 2010 now as we put that project together.''
Committee Chairman Denis Anderson said he liked the idea of longer-range planning.
"What he's asking is we're going to do all these things -- cuts -- administratively,'' Anderson told the committee.
"I think if we're careful, we can probably let them sit for a while, maybe not even do them this year,'' said Schmit.
One item officials are reconsidering is the purchase of a second street sweeper, estimated at $170,000. The sweeper is part of the city's five-year storm water pollution prevention plan, which was approved by the state. The sweeper would be used to remove sand and debris in the streets and help the city comply with state permit requirements to reduce storm water pollution.
"We are in the third year,'' Schmit said. "The plan is not to be taken lightly. We might want to pursue this, this year. It's a big ticket item.''
Committee member Tim Johnson said the city is still vulnerable to deeper LGA cuts.
"It's just long-range budget planning that we're not accustomed to,'' said Schmit.
In other business, the committee:
- Denied a request from Greg Anderson, lead volunteer to the Music Matters Hangar Dance Benefit for the Willmar High School Music Department, to waive the city's $500-$700 fee for renting the Showmobile for the fundraiser.
- Voted to accept a $1,000 donation from the Willmar Area Senior Citizens Club to the Community Center to be used to help with special events at the center.