One more go 'round for city budget talks

Some years, because the budget has been passed, the property tax levy set and other important matters taken care of, Red Wing City Council forgoes its second meeting in December.

Not this year.

City Council will meet one more time in 2010 on Dec. 27, when council members will look to finalize Red Wing's 2011 budget and levy.

Council passed a 2 percent levy hike at its last meeting as well as a balanced budget. But Mayor John Howe vetoed the levy and line-item vetoed two new fees contained in the budget this week.

Because of that, council will meet and look again to pass Red Wing's 2011 budget and levy to ensure the city can continue to operate as Jan. 1 rolls around.

City Council Administrator Kay Kuhlmann said there are three basic scenarios that could play out that Monday.

• Council could override Howe's veto if the five or more council members supported the budget and levy as currently proposed. Support amongst council members for both the levy hike and fees has been below the 5-2 threshold needed for a veto, however.

• Council could come to a new consensus on the levy and budget and pass new resolutions.

Howe -- who informed the council Monday that he will not be at the Dec. 27 meeting because he'll be on vacation -- will have five days to veto any new levy or budget resolution.

• If a veto override is not attempted or is unsuccessful or if Howe vetoes new resolutions after the Dec. 27 meeting, things would become more complicated.

In the event council fails to pay a levy resolution, the county would certify a flat levy -- meaning the same amount as was levied in 2010 -- for Red Wing in 2011, Kuhlmann said.

More problematic, however, would be if Howe vetoed the budget again.

If the city fails to pass a budget, administration would not be authorized to spend any money and city operations would seize up.

"We'd be in shutdown mode," Kuhlmann said.

To that end, Kuhlmann said she will propose the council pass a resolution allowing for emergency spending. This resolution would allow the city to at least run its police and fire departments without an approved budget.

If the city were to pass a 2 percent levy hike, $253,202 would be added to the city's coffers. A city memorandum estimates the hike would cost a resident with a $125,000 home's tax bill by $3.42 - going from $569 to $572.

The other items of contention are two proposed franchise fees that would be added to residents' gas and electric bills. The gas fee would add 75 cents to residents' utility bills, while the electric fee would add $1, according to the memorandum. The fees would add $210,000 to the city's coffers.

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