State imposed levy limits, local government aid causes council to reconsider its spending
The Farmington City Council is back to the chopping block as new state restrictions continue to limit the 2014 levy. Since the city is receiving local government aid that nearly equals 3 percent of the 2013 amount, Farmington cannot increase its operating tax levy next year because of a 3 percent cap.
Farmington City Council officials expressed frustration at a June 24 budget workshop at the state intervention that has “backed them into a corner.”
“Shame on our lawmakers and governor,” said Council Member Jason Bartholomay. “Especially for a city like us that has been conservative, and now it handcuffs us.”
“I’m so spitting mad that I can’t see straight,” said Council Member Christy Jo Fogarty.
The council plans for LGA money to go toward one-time expenditures, but it would not cover the ice arena levy, operational increases and capital improvement plan the council spent months discussing and planning as part of its five-year strategic plan.
Now the council must look to cut $306,441 from its proposed 2014-2015 budget, which will be adopted at the end of the year. The council also explored the idea of using some LGA money for operational costs, so they do not have to make more cuts in staff. The council was torn on this option.
The council also discussed the possibility of getting a $125,000 bond to fund the CIP.
“We can’t keep pushing this CIP project down the road,” said City Administrator David McKnight.
Mayor Todd Larson agreed: “We’ve been kicking this can down the road way too many years.”
The project includes road improvements such as the Akin Road area that needs a face lift after more than two decades.
“The roads are terrible. … It’s embarrassing,” Larson said.
City Engineer Kevin Schorzman said waiting on the project could be more costly as construction costs increase over time, and the city could incur more cost by waiting.
Finance Director Robin Hanson also said bonds are at record-low interest rates.
Council Member Doug Bonar said he is not in favor of the bonding, but understands the city has been dealt a difficult hand.
Council Member Terry Donnelly agreed: “If there’s another way to go without bonding, I would do it. But it’s not an option.”
The city will look into a bond and present it at a future meeting along with specifications for the Akin Road project.
An exact formula for the 2014-2015 budget will not be available until Sept. 1. Other cities such as Burnsville will have to make similar cuts to its proposed budget, while others such as Rosemount are largely unaffected by the limits.
Farmington will continue its budget discussions at public meetings in coming weeks. The city meeting calendar is available online at ci.farmington.mn.us.