Although the budget is still being worked on, the city of St. Francis 2013 budget has already been cut.
The St. Francis City Council Aug. 20 unanimously approved $193,000 in cuts.
Even though they are still working on the budget, the reductions have to be made now to realize all the benefits, said City Administrator Matt Hylen.
The cuts are based on the budget discussions the council had earlier this month regarding essential city services and what the council is willing and not willing to give up, he said.
The cuts include:
• $30,000 from street maintenance and repair, which will mean less seal coating and crack filling of roads;
• $25,000 in tuition reimbursement program eliminations;
• $18,000 for miscellaneous contracted services, such as tree trimming;
• $20,000 reduction in contracted planner consultant fees;
• $56,000 with the elimination of the assistant public works director position;
• $40,000 by lowering the transfer amount to debt service.
Hylen plans to cut an additional $4,000 from the budget, but has not determined where as of yet.
Pioneer Days funding has not been included in the budget, Hylen said.
The city will also decrease its fund balance by nearly $61,000, leaving the city’s reserve fund at 46.6 percent, he said.
Even with the cuts, the city will have to consider increasing its levy by 5 percent, bringing in revenue of $140,000.
“This gets us closer to balancing the budget,” Hylen said.
Is the 5 percent going to get the city where it needs to be without drastic of cuts in the future, Councilmember Steve Kane asked.
That is a tough question to answer and he can’t give the council a good response, Hylen said.
Five percent will get the city through the next fiscal year 2013, he said.
“I just want to make sure we are doing the right thing now to build ourselves for the future,” Kane said.
“With decreasing state aid, the slow economy, a zero percent levy increase for the last two years, increasing costs to complete essential services as well as constant increase in unfunded mandates for the state of Minnesota, our city is forced to consider substantial cutbacks to maintain financial solvency,” said Hylen in his recommendation memo.
Councilmember Jeff Sandoval said the council should consider an 8 percent levy increase and, depending on the impact, it can reduced.
For the last two years, the council has made no increases to the levy and now it has to move forward, Councilmember Chris McClish said.
Increasing the levy is something the council should consider as it does not know what gas prices will do and the council needs to look to the future, he said.
The council will need to set the preliminary levy at its Sept. 4 meeting.
Tammy Sakry is at [email protected]