Finance director ‘pretty sure’ city won’t make it through 2020 without increase

 

Anticipated budget changes meant the first draft of the 2020 budget was presented to the Albert Lea City Council with an anticipated levy increase of 5%.

The city’s finance director, Kristi Brutlag, said she was “pretty sure” the city would not make it through 2020 without a levy increase.

“This doesn’t surprise me at all that we are where we are,” Brutlag said.

The debt service levy could increase by 11%, she said. Brutlag did not have an estimate as to how these potential increases could impact individual taxpayers.

The budget is still in its draft stages as discussion continues ahead of Sept. 23, when the city must solidify its proposed budget and levy for review by the county auditor. The final levy may go down — but not up — when it is certified in December.

Fourth Ward Councilor Reid Olson said it is still early in the process, and the estimated levy may start high and work its way down.

“We’re a long ways from finished,” Olson said.

The largest of the city’s budget expenditures from the general fund — 70% — goes toward personnel costs. The largest of these expenses is a 3% cost of living adjustment and benefit changes, which will cost over $240,000.

The last time the city did a 3% cost of living adjustment was in 2005, said Human Resources Director Mike Zelenak. Since 2017, cost of living adjustment increases have been 2.5% yearly.

Brutlag said she had also set aside $175,000 in potential adjustments from the result of a compensation study currently underway. Though the study is about two weeks behind schedule, Zelenak said he expects the study’s results in October. Brutlag said it is highly possible there will be groups of city employees who will receive increases.

Third Ward Commissioner Jason Howland asked whether the compensation study would eliminate the possibility of employees asking for a raise. He referenced a recent disagreement between Freeborn County and Freeborn County Sheriff Kurt Freitag over the sheriff’s salary, in which Freitag sued the county and won an increase.

Zelenak said any employee can ask for an increase, but city employee pay is based on a classification plan that pays employees based on a calculated value, driven by data, on that employee’s value to the city. Therefore, to receive a raise, the classification of that person’s job would need to change, Zelenak said.

The county also increased the amount it is asking the city to contribute to the joint Law Enforcement Center by $30,000 to a total of approximately $215,000.

Both Mayor Vern Rasmussen Jr. and 1st Ward Councilor Rich Murray remarked on the increase. Rasmussen said he would like to better understand the cost breakdown justifying the increase, as the city purchased part of the building that houses the police station. Public Safety Director J.D. Carlson said he believes the city has received a good deal throughout the years, as he believes many services in the past — for instance, IT support — were not charged to the city. A portion of that money also pays for the record staff’s salaries, Carlson said.

The expenditures do not include the potential costs associated with hiring two new positions as requested by the directors of Public Safety and Public Works, Howland pointed out.

General fund expenditures overall would increase by 2.99%, or $493,662, Brutlag said.

General revenues are anticipated to rise as well, Brutlag said, by $241,547. A large chunk of that is due to an almost $190,000 increase in local government aid.

The City Council intends to set a special meeting to discuss further budget items.

“There’s going to be an increase in taxes this year, and I think we need a little more time than trying to have to jam it down our throats in an hour,” Rasmussen said.

In other action:

• The City Council approved an agreement for professional engineering services to conduct a biological nitrification pilot plant study. The study is in line with recommendations heard at the last City Council meeting and would evaluate design parameters for a change in how two treatment facilities treat ammonia, said Public Works Director Steven Jahnke.

• The City Council approved amending a professional agreement in order to receive an updated Albert Lea Airport master plan, intended to look at any needed improvements for the airport, and complete an airport layout plan. Jahnke said the plan will look at existing buildings and see where, if expansion is in the future, to put additional hangers. It will focus on the infrastructure of a future buildout, Jahnke said. The City Council also approved executing a grant agreement with the Minnesota Department of Transportation for airport improvements.

• Rasmussen encouraged attendance at the Sept. 7 Out of the Darkness suicide prevention and awareness walk. Registration begins at 9 a.m. in the Trinity Lutheran Church parking lot. The event also includes a memory wall and candle-lighting.