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Council adopts 2009 budget, levy but changes are surely coming

By Tom Larson

Sun Tribune

The Morris City Council approved its 2009 budget and tax levy, but it might not be too long before significant changes are made to it.

The council on Tuesday adopted a 2009 budget of $8,418,760, and a levy to be collected in 2009 of $1,098,501.

But the current and projected budget deficit facing the State of Minnesota had City Manager Blaine Hill saying that current budgets "may not mean much."

The city is losing about $128,000 in Local Government Aid it was due this month. That total was the city's contribution to the state's plan to erase a $426 million shortfall in its current budget.

And the prospect of losing more aid is apparent. Budget forecasts released late this year indicated the state faces a $4.8 billion deficit for the 2010-2011 biennium, and there are some predictions that that dollar amount could grow to $6 billion by the time new forecasts are issued in early 2009.

Hill said the city can spend down general fund reserves to make up for the lost LGA, but also suggested that the council approve its current budget with the knowledge that measures will be taken to ensure it won't be spending money needed to balance its budget after the Legislature hammers out its cuts.

That may mean a postponement of infrastructure improvements planned for the Highland Homes Addition this summer, and combing through the budget to eliminate services not vital to city operations.

Hill also recommended:

• Freezing capital purchases. The city currently has about $250,000 in such expenditures that will be put on hold until the state works out its deficit plan.

• Additional restrictions on routine purchasing authority for department heads.

• Identifying personnel in an effort to reduce the workforce through early retirements or attrition.

• Limit city-related travel.

• Review fees to determine if higher charges are warranted.

• Establishing a 2010 budget and levy template to study the tax ramifications of shifting from aid to taxes, if needed.

"We can't tax our way out of this situation," he stated.

In other city business:

• The city approved a conditional-use permit for Stevens County for its planned building and renovation project.

The city's Planning Commission approved the permit with conditions that lighting be dark sky compliant, that the landscaping be reviewed and approved by the city, that parking lot entrances be reviewed by the city, and that storm water removal plans meet with approval of the city.

The county's $15 million plan includes renovation of the current courthouse and the construction of a jail and law enforcement center.

• The council approved its Five-year Capital Improvement Plan.

The plan begins with work anticipated for the 2009 work season, although it could be revised based on fluid state and city budget conditions.

See the Dec. 31 Sun Tribune and Web site for a full list and scope of the projects.

• The council approved raising Morris Transit fares.

Fares for scheduled rides will increase from $1 to $1.25, and for unscheduled rides from $2 to $2.50.

Fare increases were first discussed because of the rising price of fuel, and since fuel prices have dropped significantly, the state budget crisis led the city to move ahead with the increase.

The city's last transit fare increase was in 2001.

• In a related item, the transit service eclipsed a ridership record it established last year.

The transit service reached its new ridership record on Dec. 18. Last year, the service had more than 60,000 riders, the most in its then-33-year history. The previous record was 59,775 in 1997. This year's total surpassed the record with two weeks left in the year.

• The city renewed a three-year lease with Gerhard Jacobson to farm 132 acres of excess land around the Morris Airport.

Jacobson will pay $30 per acre, and he pays the taxes on the land.

The city contemplated taking bids on the land lease, but Hill said Jacobson has been working the land for some time and is familiar with the farming activities and the limited types of crops that can be grown in the location.

• The council held a first reading on an ordinance to charge a 3 percent Lodging Tax on the gross receipts of local hotels.

The money collected would -- as mandated by state law -- be used for promotion of the city. The council earlier this month approved discontinuing an annual $7,000 donation to the Morris Chamber of Commerce. Instead, the funds collected through the Lodging Tax would be sent to the chamber for promotional purposed.

The council was informed by Hill that the tax is not popular with local hotel owners. The council also postponed adoption of the ordinance so wording exempting campgrounds could be added.