Erik Burgess, Published November 25 2013
Moorhead looks to trim more from already lean budgetMOORHEAD – City leaders here could balance next year’s budget, in part, by trimming an already lean operating budget.
It’s a move that could mean cuts to city services, and several City Council members said at their meeting Monday night that they wanted to see specifically where cuts would be made before approving the final budget Dec. 9.
Moorhead still needs to resolve a roughly $199,000 deficit in its operating budget. The deficit had been $342,000, but a proposed development in the tax-forfeited lots of Stonemill Estates expected to close soon will give the city about $150,000 in special assessment revenue.
The council appears set to keep next year’s preliminary tax increase at $32 on the median-valued home of $139,900, money that will be spent solely on the city’s debt and doesn’t cure the operating deficit.
The city will hold a public hearing on the levy and budget at 6 p.m. Monday at City Hall.
To fix the operating shortfall, Finance Director Wanda Wagner proposed making 5 percent cuts to departmental discretionary funds, which include items like office supplies, travel, training and fuel. But she warned that another 5 percent cut could affect city services of departments with already lean budgets.
“We’re hoping that it doesn’t affect their operations significantly, but it’s not going to go without pain, I’m sure,” she said.
Several council members said they were concerned about the street department making those cuts.
“Because that’s one of the things that we hear most about,” Councilman Mike Hulett said.
A 5 percent cut to streets would save the city about $25,902. Wagner said what she proposed didn’t include cuts to asphalt, oil and gravel – key ingredients for sealcoating and patching roads.
To further help balance the budget, the council also could change the way it gets revenue from Moorhead Public Service.
Each year, the city receives a “revenue transfer” from MPS, the city’s publicly funded utility. Next year’s proposed transfer is about $8 million.
The transfer is made up of three parts. MPS sends $50,000 to a city economic development fund. It also sends 5 percent of its gross revenue to a city capital improvement fund. That number is about $1.7 million right now.
Finally, MPS also sends about 17 percent of its gross revenue – about $6 million this year – to the city’s general fund. The city cannot ask for more than 20 percent.
To balance the city’s operating budget, Councilman Luther Stueland proposed moving some money from the capital improvement transfer to the general fund transfer without increasing the overall dollar amount that MPS is sending over.
City Manager Michael Redlinger said he believed it was possible to do, as long as the city stays under the 20 percent cap.
Councilwoman Nancy Otto, though, warned her colleagues that taking money from the capital improvement fund might not be wise with Oakport Township soon to be annexed into Moorhead and the possibility of bringing the metro’s only toll bridge into public ownership.
“I’m not saying we shouldn’t do it, but I’m saying we better be careful for future planning,” Otto said.
Readers can reach Forum reporter
Erik Burgess at (701) 241-5518