Farmington city council plans big budget cutsWhen you trim all the fat away, usually all that’s left is the bones. And that’s pretty much what the city of Farmington will operate with over the next couple of years – the bare bone necessities. In a complete reversal from last summer’s proposal of a nearly $1 million increase in the tax levy, Farmington City Council members gave the nod to $162,500 in cuts from the proposed 2012 budget.
By: Michelle Leonard, The Farmington Independent
When you trim all the fat away, usually all that’s left is the bones. And that’s pretty much what the city of Farmington will operate with over the next couple of years – the bare bone necessities.
In a complete reversal from last summer’s proposal of a nearly $1 million increase in the tax levy, Farmington City Council members gave the nod to $162,500 in cuts from the proposed 2012 budget, and allocated $367,500 in one-time fiscal disparities money to next year’s operating budget.
The move makes the budget tight for 2012, but it also sets the city up for significant budget cuts in 2013 that will likely result in the loss of jobs around city hall.
Farmington city administrator David McKnight didn’t waste time letting employees know what lies ahead over the next two years. On Tuesday, he sent a memo out to city staff outlining council’s decision.
Annually, the city of Farmington receives an allotment of fiscal disparities funds from the state of Minnesota. This year, the city received more than they had budgeted for, which meant the city council had to decide what to do with approximately $542,000 in one-time funds.
Change of plans
Since late July, the Farmington City Council had been considering a plan to increase its tax levy by nearly $1 million and establish several funds to address street, maintenance and equipment needs that exist in the city. After a series of comments from residents at three open houses, and receiving real numbers when residents got their 2012 proposed property tax statements earlier this month, council members abandoned the plan to increase taxes at a Nov. 22 budget workshop. Instead, they gave McKnight less than a week to come up with $175,000 in cuts to the proposed 2012 budget.
McKnight presented those cuts to council at a workshop Monday evening. In planning the coming year’s budget, city staff had figured in increases for things like mileage, fuel for city vehicles and gas and electricity for the various city buildings. A good chunk of McKnight’s cuts came from those increases.
Another $18,400 was cut from the city’s contingency fund. McKnight also trimmed his own $4,900 salary increase from the budget. A $25,000 allotment for a proposed part-time finance position was initially cut, as well.
However, finance director Teresa Walters argued her case for the position. During certain times of the year – particularly around audit time – the finance department will not have enough staff to do all of the associated work without paying overtime, and the proposed budget does not allow for overtime pay. Council members agreed to allocate $12,500 – half of the amount Walters had requested for the part-time position – so that when the time comes, Walters could bring in a temporary employee to help with the city’s finances.
That change brought the total cuts to the 2012 budget to $162,500. However, some other real needs exist in the city for the upcoming year, including a need to start up the city’s sealcoating plan again. Sealcoating was among the additional funds originally proposed in the $1 million levy increase last summer. Last week, council members agreed to include a levy increase of $350,000 to cover sealcoating, as well as an additional $36,000 for turnout gear for the Farmington Fire Department, $15,000 for trail maintenance and $5,000 for building maintenance.
In exchange, though, council had to make a decision – either increase taxes to cover those expenditures, or use some of the excess fiscal disparities money.
This week, council members opted for the latter. Of the available fiscal disparities money, they chose to allocate $175,000 to pay off a deficit in the Economic Development Authority’s fund balance, then put the rest toward paying down the 2012 operating budget.
That means approximately $367,000 of one-time funding is now going toward 2012 spending. Because fiscal disparities comes from the state, the city of Farmington will likely continue to receive that funding in the future, but McKnight and Walters cautioned against relying on receiving an excess amount like the city did this year.
With council’s direction to include that one-time allocation for 2012, McKnight now has to look to 2013 to find cuts to offset that $367,000.
“That number is so big, literally everything is on the table. That’s the best way to put it,” McKnight said Tuesday.
With those kinds of cuts looming for 2013, McKnight plans to start making some structural changes to city staff and services in the coming year. That way, when it becomes time to sort out a 2013 budget, some of the budget savings may already be in play and council will not be faced with as many last-minute decisions as they have been for 2012.
The content of McKnight’s memo to staff Tuesday summed it all up.
“Basically I told them $367,000 is a big number, so you know what that means,” he said.
The Farmington City Council will hold a truth in taxation hearing at the Dec. 5 regular council meeting at Farmington City Hall. That meeting starts at 7 p.m.
The 2012 budget and levy must be ratified and to Dakota County by Dec. 28.