Council mulls revenue options

Borrowing, a city sales tax and adding fees are options Red Wing City Council considered during a budget workshop Tuesday as new ways to add money to City Hall's coffers. But how much of appetite council members have for these measures remains to be seen.

Finding new sources of revenue will be important in adjusting to a tough economic climate, one in which Red Wing is expected to receive fewer state aid dollars than in previous years, city administration said.

Council members agreed they'll likely have to embrace some of the proposed revenue options, but shied away from others.

In order to pay for big projects, council members seemingly agreed they'll have to embrace some amount of borrowing.

"The age of our infrastructure is catching up with us," City Council Administrator Kay Kuhlmann said. "We've done a good job of staying debt free, but we may not be able to do it into the future."

Past councils have been able to avoid borrowing money for projects -- at least for those projects dependent on local property tax dollars or state aid money; the city has bonded for projects related to enterprise operations, which are funded by fees.

"To do our capital projects we may have to go into the bond market," Council President Mike Schultz said. But he along with other council members said they must make sure not to go overboard.

Adding a city sales tax was an idea council members found intriguing.

The council has flirted with the idea in the past and on Tuesday there was again at least a passing interest. City officials noted, however, revenue raised by the tax is supposed to go toward projects of " a regional significance," according to state rules.

Council members said they weren't keen on charging for parking on downtown streets, another revenue option that was suggested by city staff, because they said that measure could hurt downtown businesses. However, council members said they might be interested in charging for parking in public ramps.

The workshop ran out of time before council members could discuss their interest in other potential revenue sources, including, several potential fees. Council took no official action.

Tuesday's workshop was just one in a series the council is holding to work on next year's budget and some long-term financial planning. The next workshop, scheduled for July 8, will focus on potential service cuts.

One council member disagreed with the format, however.

"I think we're going at it backwards," Council member Carol Duff said, arguing the council should look at potential cuts before looking at ways to add revenue.

The council plans to gauge public opinion on budget issues by conducting a survey this summer and holding public forums.

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