City officials find ways to cover more than $300K reductions
WILLMAR -- City officials say they've found the revenue they need to cover both a $286,032 reduction in this year's Local Government Aid and an unexpected $32,000 reduction in this year's property tax levy.
The combined $318,032 loss will be covered with $320,269 in revenue from a variety of sources.
The revenue cuts, and the solution to funding those cuts, were presented to the City Council's Finance Committee on Monday by City Administrator Michael Schmit and City Finance Director Steve Okins.
The committee approved their recommendation to amend the 2010 city budget to reflect the budgetary changes.
Denis Anderson, Finance Committee chairman, said he was pleased the city is able to basically handle the reductions internally. As a result, Anderson said, local residents won't see any cuts to the services that they've come to expect.
The $286,032 LGA cut is Willmar's share of a state supplemental budget bill approved by the Legislature and signed by Gov. Tim Pawlenty.
It was intended to cover the remaining state budget deficit for the current two-year budget ending June 30, 2010, according to Schmit.
He said $32,000 abatement reductions were included in the recommendation after estimates showed the property tax levy would be less than expected because of previously approved property tax abatements granted for businesses and economic development activity.
Much of the deficit will be made up with $225,000 in administrative fees charged to this year's nearly $4 million street improvement program. The city charges 15 percent of annual improvement program costs to cover engineering, administrative time, publication costs and bonding and legal fees, Schmit explained.
Other revenue sources are:
- $40,000 from the proposed sale of a 1990 fire department rescue van, which will be replaced with a trailer for hauling fire department equipment. The trailer is being built and will be delivered in May.
- $9,600 from the lease of the field at Taunton Stadium by the Willmar Stingers of the Northwoods Baseball League. The revenue was not incorporated into development of the 2010 budget because the city didn't know the Stingers would be coming to Willmar. The rental income will offset city costs for maintaining the field.
? $11,100 resulting from recalculation of revenue from contracts under which the city provides fire protection services to Willmar and Dovre townships. When the contracts were recently recalculated, revenue came in higher than expected.
? $34,569, which had been budgeted in 2009 for fire station painting and insulation but was not spent because much of the work was done by volunteers. The unspent funds will be carried over to the 2010 operating budget.
Schmit says many communities are struggling with LGA cuts.
"And I'm not saying we're not struggling. But up to this point we've been able to deal with the cuts in the Local Government Aid program by doing things a little differently, using some excess dollars here and there. We haven't had to reduce our work force at this point, but we're not adding either.''
In other business, Schmit said the city will have a fund balance of $800,000 going into 2011. The optimistic outlook results from cuts made in the 2009 budget due to LGA reduction. The money that was cut from the city budget was set aside and not spent in 2009 and will be moved forward to 2011.