NEW ULM - The New Ulm City Council will holds its Truth-in-Taxation public hearing for the 2013 budget at 6 p.m. today in the Council Chambers at City Hall.
The proposed 2013 budget is $20,488,087, which is 5.1 percent, or $1,099,915, less than the preliminary budget. The budget will reduce its total expenditures by $681,826 to $9,238,671 while simultaneously seeing its projected revenues drop $197,826 to $9,088,6712. The preliminary budget required $1,085,496 more from the Property Tax Levy, which would have produced a maximum property tax increase limit of 19.1 percent.
The current status of the 2013 budget reduced the property tax increase to 4.15 percent due to several new budget cuts, which will have impacts on city operations and local organizations.
The biggest item was moving $375,000 in street repairs from the property tax levy to bonding. The City previously moved the portion of the annual street repair cost off the bonding for the project to property taxes to reduce the long term cost of City debt. Traditional city financing practice typically advises to only bond for items that will last at least the term of the 10 year bonds. The change may result in the City specially assessing property a higher amount when a street repair project is completed.
Cuts for organizations
Another item that may impact local groups is select reductions to organizations receiving subsidies. The New Ulm Retail Economic Development, the New Ulm Battery, the Concord Singers and the Municipal Band were spared initially proposed cuts.
However, the organization that will be most impacted by the cuts is the Bavarian Blast festival. The event nearly ended in 2011 after a heat wave caused severe reductions in attendance. However, a complete redesign of the 2012 event resulted in a successful year while paying off all its outstanding debts. The festival currently receives the entire amount of the $5,000 festivals subsidy. Although initial suggestions cut the full amount, it will be cut only $2,500.
Bavarian Blast board member Paul Sabatino said this year's success was a big step for the festival, but he added that it still remains in a very tentative financial situation. He said he was concerned that a cut to its subsidy would bring a return of the 2011 financial situation.
"We're not sitting on much money," said Sabatino, "We need all the support we can get from the community."
Other subsidies facing reductions include $3,444 for Healthy Community/Healthy Youth, $3,000 for the Lind House Association, $1,500 for the Wanda Gag House and $1,000 to the Fair Grounds Association. The selection process on which subsidies to reduce focused on organizations the Council considered capable of generating its own funding to cover the reductions.
Several City departments will see reductions to pull costs off the property tax levy. The Police Department and the Street Department each had $30,000 cut across the board from their budgets. The Park and Recreation Department had a total cut of $65,000. The department prevented adding $200,000 to the property tax levy by not completing the planned Harman Park shelter improvement project, instead moving the project to 2014.
In general, City departments reduced funds spent on conferences and educational classes for employees.
The budget also gained $48,286 in reductions to the property tax levy by finding a duplication of expense in the Debt Servicing funds during a review of the budget.
The 2013 budget hearing starts at 6 p.m and is open to public comment.
(Josh Moniz can be e-mailed at firstname.lastname@example.org)