HomeMy WebLinkAbout9E - State Deficit
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
CITY COUNCIL AGENDA REPORT
April 7, 2003 (\/\ ~
~~nk Boyles, City Manag';~
CONSIDER APPROVAL OF A REPORT SETTING FORTH AN APPROACH TO
RESPOND TO ANTICIPATED LOCAL GOVERNMENT AID CUTS AND
MARKET VALUE CREDIT CUTS IN 2003.
History: The State of Minnesota has experienced a biennial budget shortfall in the
vicinity of $4.2 billion to $5.5 billion. In an effort to balance the proposed budget,
Governor Pawlenty has proposed a series of measures including reduction of
local government aid and market value credits received by local governments.
The Governor's proposals which affect Prior Lake include a cut of $45,000 in local
government aid, and $322,842 in market value credit, for a total projected 2003
cut of $366,842.
Current Circumstances: Until final legislation is drafted, we cannot be certain of
the exact magnitude of the 2003 cuts. Finance Director Ralph Teschner advises
me that while the State figures allegedly cut 100% of the City's Local Government
Aid and Market Value Credit, they are actually $52,581.58 less than the total
amount we receive which is $419,423.58. However, I believe it is prudent that we
prepare now for the cuts necessary to achieve the Governor's $366,842
recommendation.
Our ability to make these cuts is complicated by the fact that our 2003 budget is
already adopted. For this reason, the Governor's proposal recommends an even
larger cut for most cities in 2004 as opposed to 2003. In the case of Prior Lake,
the cut is identical in 2004 since the 2003 cut eliminates all of the City's local
government aid and market value credit.
To accomplish the necessary savings, I have sought input from Department
Heads and staff. The recommended actions to respond to the Governor's
proposal are shown below:
CONTINUED ON PAGE 2
16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 I Ph. (952) 447-4230 I Fax (952) 447-4245
1:\CQUNCIL\AGNRPTS\2003\2003 BUDGET o.l:JI~OO>PORTUNITY EMPLOYER
Contingency.... ........................... ............................................. :-$1 00,000
Recreation Coordinator... .................... ................................ ..... .~$70,000
Dance Studio Lease.............. ............. .................................. .....~$25,000
Police Unfilled Positions.... ............ ................ ........................... .:-$40,000
Delay Filling Part-Time Park Maint. Position..............................:-$15,000
Reduce # of Seasonal Park Maint. Hires...................................~$15,OOO
Professional Services - City Manager....... ....................... .......... .~$5,000
Computer Replacement ...................................... ........... ........... ..:-$5,000
Street Overlay.................... ......... ...................................... ........ .-:$40,000
Park & Rec Intern................. ............ ......................................... ..-:$6,000
Out-of- Town Conferences..... ..................................................... .:-$7,600
Revenues over Expenses......................................................... :-$38,242
Total
-$366,842
ISSUES:
Prior Lake is fortunate in that, unlike some communities, we never received a
great deal of aid. We are also fortunate that the City Council prepared for this
situation by budgeting prudently for 2003. The Contingency allocation is the best
example of the Council's efforts. In making the proposed cuts, I have tried to
minimize impacts upon full-time employees as I believe that our staffing is
appropriate for our development status. I also have attempted to select those
items which will have the least impact upon our ability to achieve our 2003
objectives based upon the 2020 Vision and Strategic Plan.
ALTERNATIVES: (1)
(2)
Motion and Second to accept the report.
Request further information.
RECOMMENDED
MOTION:
In the absence of Council direction to the contrary, we will implement the savings
as outlined above.
1:\COUNCIL\AGNRPTS\2003\2003 BUDGET CUTS.DOC