GRANITE FALLS -- The city of Granite Falls is proposing a 3.32 percent levy increase as part of the 2009 preliminary city budget.
City Manager Bill Lavin said Wednesday the City Council approved the proposed preliminary budget and levy that included a 3.32 percent increase from 2008's general fund levy and a 4.77 percent budget increase from the 2008 budget.
According to Lavin's figures, Granite Falls will spend $2,049,236 in 2009, compared to $1,960,872 in 2008. With the expenses increase, the 2009 general fund levy needs to increase $21,503 to $668,462.
Since 2003, Lavin said, the city has tried to uphold its services as Local Government Aid from the state has decreased and service costs have increased. Local Government Aid is the program that provides aid from the state to cities.
"We haven't had a lot of one-time expenses that we've had to deal with," Lavin said.
" ... We've just basically been trying to maintain the level of service we have with the fairly limited resources. But we haven't really added anything."
Lavin said he explained during Tuesday's meeting just how much the Local Government Aid and levy portions of the city's budget have transformed in the past five years.
For example, in 2003 the general fund levy of Granite Falls' 2003 budget made up 14 percent of the costs while Local Government Aid made up 54 percent, Lavin said. Fast-forward to 2009, the proposed general fund levy will make up 33 percent of the budget while Local Government Aid makes up 35 percent.
During the same time period, Lavin said, the city has seen its Local Government Aid increase from $699,122 in 2003 to $721,537 this year.
"In terms of disparities, this is clearly evident of the fact that Local Government Aid has not been keeping up with increased government costs by any stretch of the imagination" Lavin said.
Health insurance is one of the greater contributors to Granite Falls' expenditure increases in 2009, Lavin said. The health insurance premium for the city will jump up 13 percent in 2009, Lavin said, after increasing almost 25 percent in 2008, Lavin said.
Lavin said salaries and fringe benefits are also becoming more difficult to manage on limited city revenues and the state Legislature's new 3.9 percent general fund levy limit.
Lavin said he expects the City Council to make minor cuts to the budget, but nothing drastic.
The council will hold its Truth-in-Taxation hearing for the 2009 proposed levy on Dec. 1 and adopt its revised budget and levy by Dec. 15.