Howard Lake-Waverly Herald, Dec. 6, 1999

HL council deals with budget increase

By Andrea Vargo

The proposed 2000 budget was approved by the Howard Lake City Council Wednesday.

The Truth-in-Taxation meeting is Wednesday, Dec. 8 at 7 p.m. in the Community Center. The budget will show a proposed increase in the certified tax levy of $75,616.

The 1999 levy was $395,015. The proposed 2000 tax levy is $470,631.

The difference between the two levies is $75,616, an increase of 19.4 percent.

City Administrator Doug Borglund reminded the council that this dollar amount will be divided among all the tax parcels in the city, and it doesn't mean that individuals will get a 19.4 percent increase.

Those increases could be more or less than that depending on the tax formula and each individual property.

Each property will pay its share based on assessed value and a complicated class rate determined by the state legislature, said Borglund.

Part of the increase in the levy is the projection for $40,000 less income from the liquor store in 2000, due to the Highway 12 improvement project.

Another rise in expenses comes as the city takes on the full responsibility for Police Officer Butch Darsow's salary. It was previously supplemented by $25,000 from a grant to the city.

Some of the other areas where increases in the estimated budget occur are the city administrator's salary, dedicated funds for each department for capital purchases (as much as $50,000), and wages and training for the council.

In the increase areas, the most notable was in the salary to be paid to Borglund, as compared to that paid to the previous administrator, Christina Frankenfield.

Borglund will have a base salary of $49,200 plus benefits that total $63,994 for 2000.

His allowance for conferences and training jumped from $550 to $1,000, and he will have a car allowance of $1,800 per year, compared to Frankenfield's $400 in straight mileage payments for 1999..

Training for the council went over budget in 1999, because the newly elected council felt it needed and got valuable training for its job. The proposed budget reflects the commitment to learning what the council needs to do its job better, said Mayor Gerry Smith.

Budget increases by category for 2000

The following figures were supplied by the city to help clarify where each category increase is projected.

  • $12,313 - city administrator
  • $9,997 - police department
  • $4,148 - mayor and council
  • $741 - deputy clerk
  • $621 - clerk treasurer
  • $11,950 - planning and building
  • $1,314 - unallocated
  • $2,331 - fire department
  • $1 - civil defense
  • $12,076 - streets department
  • $100 - skating rink
  • $560 Internet

This is the true increase in the city budget, said Borglund. The balance of the $75,616 proposed increase is due to the predicted loss of revenue from the liquor store due to the Highway 12 construction, he said.

Projects

The city faces several projects that have already put it over the engeneering budget by more than $5,000 for 1999.

The engeneering budget didn't show as an increase for 2000, but Borglund said the city should consider raising the $10,000 allocated for engineering fees.

With the Highway 12 project, new water tower, and other work, the $10,000 the city usually budgets is not enough, said Borglund.

Decrease in budget with lease program

Areas of decrease focus on items that will probably be moved from budget line items to a capital equipment lease program that was explained by financial consultant Bob Ehlers, Ehlers and Associates, Inc.

Ehlers told the council about a program for capital purchases that helped reduce the budget by some large figures.

The program would cost the city about $40,000 per year for estimated purchases of a snow blower, tractor, siren, voting matchine, loader, pick up truck, and a tanker for sludge hauling.

The lease would run for eight years, said Ehlers.

Then, he explained, the city could start trading in equipment while it still has value, rather than constantly scrambling for repairs on old items.

For example, if the city purchases a piece of equipment for $100,000, it could trade it in while it still had a value of $50,000.

This would give the city $50,000 to work with on a new purchase and require less financing for a shorter term, which would save the city money over the years.

Repairs would be kept to a minimum, leaving city employees with more time to work on other things. This would also save the city money in manpower hours, he said.

The city would be ahead of the game, rather than always playing catch-up, said Smith, who approved of the program.

The start-up costs for the capital lease program are much less than the paper work for a general obligation bond, and this would also save the city money, said Ehlers.

Also, the city has enough money in several of the funds, such as streets and utilities, that would already be available to pay the first year's payments, said Borglund.

One of the items the city needs is a snow blower/sweeper to clean sidewalks for the city.

He passed around literature for a diesel municipal tractor with attachments, and explained how some other cities are using it.

It blows snow right into the back of a truck, he said.

"We can't do that now. It is an all-day job to move one pile of snow," Borglund said.

"There are areas we can't do, because of the condition of the sidewalks," said Smith.

Citizens can't find people to clean their sidewalks, and maybe the city needs to take over this work, he said.

Sidewalk improvement was again absent from the budget, and Smith said he hopes the sidewalk utility bill passes the state legislature this year, so the city can have some dedicated funds to do necessary work.

Borglund said the city needs to do something about the blocks that have sidewalks on only half of them.

It looks like someone took a break and never came back, or the city ran out of money on that sidewalk, he said.

The city should complete them or tear them out, said Borglund.

He recommended the city look into getting a snow blower for the walks, so it wouldn't have to rely on finding someone to do it every year.

Borglund was directed by the council to get some definite costs for the equipment the city needs replaced and to come back with a proposal for the program.

He will also investigate several lending institutions for the best financial package.

Projected utility sales for 2000 are $437,228. After expenses, about $80,000 of this money will go into the sewer and water fund as unallocated money to pay for the improvements when Highway 12 is done in 2000, said Borglund.

Y2K insurance

The only other item of business was a discussion about added insurance from the League of Minnesota Cities Insurance Trust to cover possible litigation from Y2K.

Although all council members felt that nothing important will go wrong New Year's Eve, they felt they needed to cover all their bases.

The responsible thing to do for the city is to invest the $750 for the extra insurance coverage, said Smith, and the rest of the council agreed.


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