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City Council begins budget deliberations

City Administrator Mike Roth
City Administrator Mike Roth

Budgets_071510Mixdown.mp33.3 MB
It’s only July but Grand Marais city counselors need to adopt a preliminary budget by their first meeting in September. Once adopted, the budget can be reduced in subsequent meetings, but not increased. City department heads will be submitting budgets through the summer and they are being cautioned to think flat growth. The reason is tied to Local Government Aid projections from the state.
Mike Roth: In 2011, I think the picture remains really, really unclear. What they’ve told us is we’re going to go right back to where we’ve started with Local Government Aid increased. But, I don’t believe them, and I don’t think you should either. We don’t know about wages next year. Our capital improvement schedule is pretty flat, and we have the funding in our budget right now to do the things that we intend to do, but there aren’t any big items on that list, and the state’s finances continue to be a significant factor to us. But, how many things can happen between now and when they need to make those decisions? And all of them happen after you need to really have your budget.
City Administrator Mike Roth’s skepticism was shared by Mayor Sue Hakes and fellow counselors. The library has already turned in a 2011 preliminary budget that looks almost identical to 2010. Roth told the council budgeting this year was like a three-legged stool. Counselors will need to balance revenues against the cost of wages and services. Mayor Hakes said the city should plan on zero state aid. She said she’d rather lower salary increases than have layoffs and reductions in city services.
The city will enter into contract negotiations with its employees later this fall and will have to leave some room to maneuver as they anticipate their revenues and expenses.