Farmington’s latest 2013 budget plan reduces the proposed 2013 levy increase from 2.8 to 1.9 percent, but raises numerous fees for equipment and maintenance projects.
Under the new proposal, the 2013 levy would be $8.7 million, an increase of $168,959 over the 2012 budget.
The plan was reviewed during an Oct. 8 budget workshop, where concern was also expressed about old Economic Development Authority debt owed to another city fund that council members were unaware existed.
“It is clear to me that this loan repayment obligation was never fully/clearly communicated to the City Council,” City Administrator David McKnight said in a memo.
He explained the EDA’s long-standing $500,000 deficit started after the Farmington City Center and library project in the mid-1990s was improperly funded with tax increment dollars.
McKnight blamed the deficit on the city’s “practice of spending dollars that did not exist” and improper use of funds.
“They shouldn’t have used that funding,” McKnight said. “So we gave that money back with a loan (from the city’s storm sewer trunk fund). But now we’re paying that loan back through the EDA.”
McKnight said the city will continue to repay $33,500 annually to the storm sewer fund until it is repaid in 2018.
Council members expressed a desire to repay the loan earlier, possibly using fiscal disparities.
Council Member Julie May said it is scary to think about what other unknowns exist regarding the city’s finances.
“What concerns me is how can we be certain that there isn’t any other inter-fund lending that needs to be reconciled?” May said.
Finance Director Robin Hanson said inter-fund loans now require a funding agreement.
“Prior to that you don’t know unless it was documented,” Hanson said.
Under the new budget proposal, garbage fees are proposed to increase between $2 and $6 per quarter depending on the container size.
Money raised will help the city buy a $200,000 garbage truck in 2013, McKnight said.
Individual seasonal pool passes are slated to rise from $75 to $90, and family passes from $150 to $180.
Next year, swimming pool punch cards will increase from $35 to $40 for 10 punches and 20-punch cards are anticipated to rise from $60 to $80.
Storm water utility fees are proposed to rise from $9 to $10.50 per month in 2013, and some of the funds will be used to comply with stricter Minnesota Pollution Control Agency rules regulating chemicals associated with coal-tar based driveway sealants, McKnight said.
Disposing of the sediment from storm water ponds costs about five times more than regular disposal methods.
Most City Council members supported an ordinance banning coal-tar based driveway sealants so the city qualifies for state grants to help pay those high disposal costs.
May questioned many of the fee increases, including the storm sewer fee since fund has a $578,566 balance.
City Engineer Kevin Schorzman said the city has tried to buffer increases by taking losses in some years and increases in others to try to maintain enough in the fund for projects.
He said projects are planned that would deplete the fund quickly, including storm water pond work related to Dakota County’s 2014 reconstruction of 195th Street.
Other proposed fee increases include Rambling River Center memberships and usage fees for the picnic shelter, ice arena time and outdoor fields.
The City Council is required to pass a budget in December. The city’s levy maximum for 2013 is $8.8 million.
Laura Adelmann is at [email protected] or facebook.com/sunthisweek.