A significant increase in local government aid resulted in a small reduction in the general fund levy Milaca City Council members voted in favor of when it placed its stamp of approval on the 2014 preliminary budget Thursday, Sept. 12.
Milaca received $582,500 in LGA for 2013 and is poised to receive $756,250 in the state aid next year, an increase of $173,750. This was the first significant increase in LGA since before 2008. The sizeable increase this year may have resulted in an even more significantly reduced general fund levy, but City Manager Greg Lerud said Milaca has been postponing purchases and equipment replacements the past several years as LGA flat-lined.
“The city has done a good job holding the line on expenses in all funds, particularly the general fund, but needed purchases and needed improvements have been held off, and costs of everyday items continue to increase,” Lerud said in a memo to the council.
Such equipment postponements were a topic of discussion at the council meeting once it came time to vote on the budget.
“Greg (Moyer, parks director) would love two new mowers,” Lerud told the council. “We need a mower in Public Works, too.”
Mayor Pete Pedersen asked if it were possible to include new mowers in the 2014 budget as he didn’t see the equipment budgeted for next year. At $55,000 for a new industrial lawn mower, Lerud said it just wasn’t in the cards for a new one next year.
“I do think, in (2015), Greg will get a new mower,” Lerud said, adding that most of the parks department’s mowers are going on decades of use — and they aren’t the only ones.
“Our trucks are all 20 years old, too,” Lerud said.
He suggested that the council could use some of the parks department’s reserve funds to open a lease on a new mower next year, when a monthly payment plan could be worked into the budget without drawing too much down on the reserves.
Council Member Norris Johnson asked Lerud and City Treasurer Tracy Gann if he was reading the budget correctly — were the water service revenues really lower than the expenditures? Gann said yes.
“They have been for a few years,” she said.
This year, the water fund has collected $557,750 in revenues, but has paid out $746,030 so far in expenses. A $100,000 gap in 2011 has grown to become a nearly $200,000 gap this year.
Lerud told the council that water service rate increases were not placed in the preliminary budget, but he recommended that the council should host public meetings in November at which time they could set rates to increase come February of 2014.
The total preliminary levy is set at $900,777, a reduction of $6,600 from last year.
The increase in LGA also allowed the city to move the building fund into the general fund. The building fund has been running a deficit for some time, and for budgeting purposes, Lerud said it was more appropriate to make the move.
“Moving it into the general fund for budget purposes gives a better picture of what is truly happening,” he said.
Other significant changes to the budget include a projected $10,000 decrease in the airport fuel sale revenues, a decrease in the amount budgeted for fire department training in light of a new state reimbursement program, and the added expenses of projects such as the new parking lot planned for Rec Park and storm drainage improvements.
After all members of the council voted to approve the preliminary budget, Pedersen expressed his appreciation for all of the work Lerud and Gann did in preparing the document.
“Thank you both,” he said.
Lerud said it is unclear how the preliminary levy will impact local property owners. Some parcels may see their taxes increase, while others may experience decreases.
“What we can say is the city proposes to collect less in 2014 than it did in 2013,” Lerud said. “Not much less, but less.”
The final levy and 2014 budget will be voted on in December.