Council

adjusts

budget

Officials concerned about cuts in local

aid by Legislature

By RON LARSEN

Journal Staff Writer

NEW ULM -- The New Ulm City Council approved $45,921 in adjustments to the preliminary 2003 city budget Wednesday, paving the way for final adoption at its Dec. 17 regular meeting.

The preliminary budget totaling $12,744,898 will be increased by that amount before its adoption. The budget as it now stands is $935,306 or 7.9 percent higher than the 2002 budget that totaled $11,809,592.

All adjustments were suggested by Finance Director/City Clerk-Treasurer Gary Gleisner.

"We could say that you need to take $50,000 out of this area or $25,000 out of another area," Council President Dan Beranek said, "but I believe the best course is to approve the adjustments. There isn't anything in the budget that shouldn't be there."

"I agree with you with the understanding that staff will hold down spending during the first six months until we see what happens," said Councilor Clark Tuttle in making the motion to adopt the adjustments.

"I think that is a good move. We don't have to spend all the money," Beranek said. "There are things that can be carried over to the next year if things get tight."

The fate of local government aid was the big topic at the budget hearing.

The city is anticipating LGA totaling $4,296,404, which is 33.7 percent of the city's budgeted revenue in 2003.

City Manager Brian Gramentz said the current speculation is that LGA will be decreased by 10 percent by the Legislature.

"If the aid is reduced by 10 percent, then each department's budget will be reduced by 10 percent," Gleisner added.

"My fear is that they'll take a simple approach in cutting LGA and not consider where the money comes from," Gramentz said.

He then outlined his planned approach to dealing with a cut in aid.

"First, we will look at utilizing fund balances, reserves, in other words, so let's say we take $175,000 out of reserves, we then will look at the capital sinking funds and maybe take $150,000. That's $325,000. Then, we'll go back into the budget and not fund some projects that can be done later. The last resort would be to increase the property tax levy."

Property taxes in 2003 are expected to total $3,829,284 or 30 percent of the anticipated revenues.

The city also will be getting $1,350,000 in payments in lieu of taxes from the New Ulm Utilities Department in 2003.

Tuttle asked if that figure could be "bumped up" to possibly a million more to help cover a loss in LGA. He was told the amount is limited to 5 percent of the PUC's gross revenues in the city's charter.

"Well, it was a good idea, but it didn't amount to nothing," Tuttle said.