Cottage Grove reworks budget with smaller spending, levy hikes
A proposed budget for the city of Cottage Grove would slightly increase the general fund as well as the property tax levy for 2014 after several years of mostly flat taxing and spending.
The City Council got its first look last week at a budget plan that would raise general fund spending to $14.14 million. That would be just about a 1 percent increase over the current year's spending. The general fund is used to pay for most city services, such as police and public safety, parks, public works and administration.
The proposed property tax levy that is directed to the general fund would increase at a similar rate, from about $10.88 million in 2013 to $11.26 million next year. Other city charges and assessments make up the difference between general fund revenue and expenses.
State lawmakers earlier this year placed a 3 percent cap on all property tax levy increases, forcing Cottage Grove officials to re-evaluate an initial staff proposal to increase the levy by 9 percent, splitting the increase among the general fund, pavement management debt repayment and a River Oaks Golf Course budget shortfall.
Finance Director Robin Roland provided a summary of projected expenses for general government operations and the public works department last week and suggested the council find ways to eliminate expenditures that are no longer working with the city's long-term budget outlook.
"I don't think, in my opinion, we've looked at things that we should stop doing," Roland said. "There is so much stigma for us to do more, more, more on less, less, less."
Proposed in the new budget is a total gross property tax levy of $13 million, with $1.1 million allocated to debt levy.
In the coming weeks, the city will be presented with a pre-sale report to show what potential debt service payment would be with varying kinds of loans. With upcoming road repair projects, Roland added the city must sell bonds otherwise there will be no cash to fund the projects.
In May, Roland said that despite the strict cap on the property tax levy, debt service payments on pavement management projects in the realm of $320,000 will still go forward as planned.
Also proposed for general government expenditures in 2014 is a $57,000 increase in the law enforcement retirement plan and a 10 percent increase in health insurance and workers compensation plans. However, a sales tax exemption on city purchases that was approved by the Legislature will save Cottage Grove $77,000.
The general costs for the mayor and council are decreasing, Roland said, with the bulk of the expenditures coming from a $21,700 per year membership fee to the League of Minnesota Cities, a payment Schroeder said is warranted.
"We have to belong to this in order to be members of the insurance trust," he said. "And we absolutely want to be."
With 2014 being an election year, the county assessment office has budgeted for an 11 percent increase due to the addition of 15 people to serve as election judges.
As the housing market continues a gradual rebound, the city's community development department could see some minor changes. Roland said a temporary building inspector might join the department in 2015 as ground breaks on various housing developments. Builders could see a change in how they acquire permits as the city is looking into online forms, which Roland said would decrease the amount spent annually on postage.
Public works seeks new equipment
With aging equipment costing more money to repair than the city would like to pay, Public Works Director Les Burshten detailed plans for a proposed $2.23 million 2014 budget.
The bulk of the budget results from a $513,000 personal services expenses, which include hiring a new public service worker in July 2014, training on new software and addition of clerical support.
Also part of the 2014 budget is the addition of $104,000 worth of new equipment. Burshten detailed a tandem axle trailer jetter which would help clean the roughly 81 miles of storm pipe in Cottage Grove and a 6-foot rotary mower. Costing $75,000 and $29,000, respectively, Burshten told the council new equipment would help the department expand services, comply with laws and be a more cost conscious department.
The department has proposed additional new purchases in 2015 including utility vehicles and snowplow equipment.
Council member Derrick Lehrke, who questioned spending city dollars on new plowing equipment, addressed early in the workshop the desire to look into the possibility of eliminating this amenity to save money.
"We plow every sidewalk and trail, and I don't know of any other city that does that," Schroeder said, adding that it's an area to look into as the budget process continues.
Every Wednesday during August, council members and staff will meet in workshops to discuss the various city department budget proposals.
On Aug. 7, the council will discuss the parks and recreation and public safety departments, as well as River Oaks Golf Course and the economic development department.
A budget open house is planned from 6-8 p.m. Wednesday, Aug. 21, at City Hall, 12800 Ravine Parkway. The 2014-2015 budgets will be presented at 6 p.m., followed by informal breakout sessions on each department's budget.
The city plans to adopt the preliminary 2014-2015 budget and tax levy during the Sept. 4 regular council meeting.