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Farmington council weighs budget options

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It's the epitome of a good news-bad news scenario in city budget planning.

The good news is, in 2014 the city of Farmington will receive Local Government Aid from the state of Minnesota for the first time in a decade. The bad news is, because the city didn't get an LGA allocation in 2013 it cannot increase its operating tax levy for the coming year.

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Farmington City Council members weighed their options after hearing this news during a work session Monday. And they didn't necessarily like the options that were presented.

For practical planning purposes, Farmington city administrator David McKnight has urged council members to think of the LGA allocation -- estimated at $245,952 -- as a one-time funding source, given that the city hasn't qualified for LGA in 10 years. And, he cautioned, the city may not get it again, depending on decisions made by state lawmakers.

With that in mind, McKnight and finance director Robin Hanson came up with a list of one-time expenditures for the LGA. That included putting some aside for repairs needed at the two fire stations, equipment for police and fire, sandbags for flooding emergencies, and so on.

Those expenditures were outside of any planned for 2014 tax levy funds. Council members wanted to make some increases to the levy, maybe find some funding to allocate to an ice arena addition. They wanted to meet some of the general increases in operational costs and to set money aside for a capital improvement plan that would address the city's funding needs for vehicles and road construction projects.

But the stipulations attached to the LGA allocation prohibit the city from increasing the tax levy. In effect, McKnight told council members Monday, it means they will have to find more than $306,000 in reductions from a proposed budget.

"The frustrating part is, it's not our budget anymore," mayor Todd Larson said.

Council members have the option of taking some of the Local Government Aid money and assigning it to the operating expenses. They discussed using a portion of the funds, maybe $100,000 or so, to address the operating costs. However, McKnight cautioned that doing so would mean finding one-time expenditures on the general fund budget instead, because he did not want to count on LGA funding for the future.

The CIP

The CIP was a more immediate concern, but it was also one that offered an outside solution. Council had planned to increase the levy by $125,000, then allocate $125,000 every year for the next seven years to set up a fund to address the CIP's road construction and equipment purchases. McKnight asked if council would be willing to instead issue a bond to start the CIP process.

"We can't keep pushing these projects down the road," McKnight told the council.

Bonding now offers a few practical advantages, city engineer Kevin Schorzman said. For one, a two-part reconstruct project in the Akin Pond area of town can be pushed ahead by three years. Besides addressing the crumbling roads, the projects would cost less as far as construction materials and inflation.

Council members were in favor of addressing the Akin Pond problems sooner rather than than later. Calling the streets the "road leprosy area" Schorzman said the roads there are 22 to 28 years old. Normal life expectancy for roads is 15 to 20 years, he added.

"I don't like bonding for CIP projects, but it was one of our goals," Larson said. "Those roads up there are just terrible."

Council asked Hanson to start the paperwork for a five-year, $1.5 million bond to be put toward the CIP. That pulled $125,000 out of the 2014 proposed budget, but left McKnight with $181,441 in reductions to find.

More budget workshops will be held in the coming months. A preliminary budget and tax levy has to be approved by Sept. 15.

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Michelle Leonard
Michelle Leonard started covering the Farmington community in June, 1994. Michelle earned her Bachelor of Science degree in Mass Communications: News-Editorial from Mankato State University in 1991. She is an active member of the Farmington American Legion Auxiliary Unit 189, and acts as the volunteer coordinator for the Minnesota Newspaper Museum which is open annually during the Minnesota State Fair. She has earned Minnesota Newspaper Association awards in Investigative Reporting, Local News Coverage, Feature Photography and Column Writing. 
(651) 460-6606
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