Council reviews

2002 budget

LGA makes up 35.6 percent of city's projected revenue

By RON LARSEN

Journal Staff Writer

NEW ULM -- Guided by the city clerk/treasurer, the New Ulm City Council moved fairly quickly Wednesday through a preliminary 2002 city budget that envisions $11.7 million in spending for next year.

With charts and graphs, Gary Gleisner and his staff illustrated the supporting documentation for the numbers contained in the budget which is to be formally adopted at the council's next regular meeting.

The councilors were shown, for example, by use of a pie chart that property taxes will provide only 27.2 percent of the revenue required to fund next year's budget.

In fact, the city's largest chunk of revenue will come from the state in the form of local government aid. At $4,165,314, LGA represents 35.6 percent of the city's projected revenue for next year.

Third largest source, at 11.5 percent, is the transfers in lieu of taxes from the city's enterprise-revenue arm, the Public Utilities Commission. Those transfers, totaling $1,350,000, represent 4.4 percent of the PUC's $30.4 million 2002 budget.

Meanwhile, the city's biggest expenditure, totaling nearly $5 million, will be in personal services--routine daily city government interaction with its citizens.

Leisure services, including the park system, recreation programs, Family Recreation Center and library services, account for 20.6 percent of 2002 expenditures.

Gleisner's staff even broke down department budget figures to provide a value of city services provided.

In effect, New Ulm taxpayers next year will be paying $2.71 a day for library services, $5.95 a day for police protection, 51 cents a day for Park and Recreation administrative services, $6.45 a day toward debt service and 70 cents a day for cemetery services.

City Manager Brian Gramentz reminded the council that because of the State Legislature's property tax reform this year, the city's taxation categories are being "compressed down" to the lowest levels of residential property value.

This means, he said, that residential properties under $100,000 may be seeing increases, rather than decreases, in their city tax bills next year.

"With the compression of rates, the pie is smaller," Assistant City Manager Thomas MacAulay explained. "The preferential treatment of residential properties is no longer in effect, and that was the legislative intent."

Whereas, in 1991, residential homesteads made up 37 percent of New Ulm's tax base, these same residential homesteads will be 61 percent of its tax base while commercial/industrial will represent only 32 percent. In 1991, commercial/industrial represented 49 percent of the base.

Gleisner asked the council to approve $94,808 in revenue adjustments and $93,575 in appropriation adjustments, all of which had been made since the council approved the preliminary budget in September.

For the most part, the council went along with his recommendations. However, the councilors balked at dropping the $10,450 annual subsidy for New Ulm Taxi and Van Service.

Gramentz defended the decision to drop the subsidy because he felt, and the city attorney concurred, that subsidizing the cab company didn't meet the "public purpose" test.

"It appears, on the surface, that the subsidy doesn't meet the test," Councilor Ruth Ann Webster said, "but I feel we have to look deeper, that there is a need for public transportation."

When Councilor Clark Tuttle suggested a city-owned alternative, Councilor Joel Albrecht replied, "No one in this room will live long enough to see a city-owned cab company make money."

The councilors agreed, however, that there might be a different way in which to provide the financial help. Gramentz reminded the councilors that one way would be the city contracting with the cab company for transportation services on a per-rider basis.

The subsidy amount was restored, with the understanding that there would be further discussion of how to change it to meet the public purpose test.

The council also wanted $6,000 inserted in the budget for the BMX park.

"I feel we can justify that expenditure on the basis that it will enhance the park," Webster said.

The council did not go along with a request by Susan Ward of Healthy Communities, Healthy Youth for a larger increase in city funding. The city's contribution was in the budget at $4,725, a slight increase over last year. Ward asked that it be raised to $8,000 to help cover lost revenue from the "sunseting" of start-up grants. The councilors kept it at $4,725.

They also turned down a request from Parents in Partnership for $25,000 toward its proposed day care center.

"The Public Utilities Commission got into the paper this summer when their attorney advised them that providing money to your organization didn't meet the public purpose test," Council President Dan Beranek reminded Dana O'Brien, representing the group. "We face the same problem that we can't give you money, either."