NEW ULM - The New Ulm City Council and city staff emphasized seeking a flat 2013 budget with neither significant cuts nor tax increases on Tuesday.
New Ulm City Manager Brian Gramentz said the informal meeting sought to increase the Council's direct input on the annual budget by interaction with staff. The meeting also intended to increase public input, such as the recent survey of city services.
Keeping tax levels stable while avoiding any new spending on a significant scale were emphasized. The focus on a stable budget intends to normalize City finances after being rocked with large Local Government Aid (LGA) cuts and the state's switch to the Market Value Exclusion program, which shifted the tax burden to businesses and forced many cities to increase taxes just to keep their budgets flat.
LGA for 2013 will remain at 2012 levels. Gramentz said the Council should remember that [$850,000] was cut out of last year's budget to handle the changes.
"It will be much harder to cut much [this year] without a big impact on services. There are no more low hanging fruit," said Gramentz.
The City is continuing to seek technology-based methods to cut costs. A switch from paper copies to digital copies is a prime example.
City officials and departments heads each provided preliminary expectations for 2013 budgets.
The City's employee health care insurance premiums are expected to ends its average of 1 percent or less growth over the last few years. A recent string of claims by city employees may bump up costs. The City's current agreement limits the maximum increases to 9 percent a year.
The City will also have a much lower reserve fund balance in 2013 after expending funds for the Minnesota River Levee project. The City has traditionally had high reserve fund balances, thus maintaining a high bond rating. The reserve balance will be lower, but it is not anticipated to affect bond ratings.
The New Ulm Police Department is expected to have a budget increase related to the hiring of two new officers. The officers are filling two positions previously vacated.
Most of the City departments will keep to the same budget as last year unless unplanned problems arise. Many of the City officials also called for filling either the assistant city manager position or creating a facility manager position. The assistant city manager position was vacated in early 2011 with Tom MacAulay's retirement. Its responsibilities have been divided up among several departments. The Council chose to leave it unfilled for this year's budget. City officials argued that extra duties limited time to do their department's work and prevented them from working towards anything besides status quo.
The Tuesday meeting was intended to only inform the Council of factors in play for 2013. The Council will begin official deliberations on the budget in the coming months.
(Josh Moniz can be e-mailed at jmoniz@nujournal.com)