Budget talks continue as deadline approaches

Red Wing City Council members and staff are working to finalize the city’s budget as the year nears its end.

Those at a workshop Thursday evening talked, among other issues, about what changes are needed now that the proposed half-cent local option sales tax failed Tuesday.

The tax would have brought in up to $14.88 million for specific projects downtown, along the riverfront and in the Pottery District. But now those items need to come out of the budget or find other funding sources.

The project helping facilitate a joint home for the Red Wing Area Seniors and Red Wing Collector’s Society probably will be removed from the city’s budget.

“Some (changes), I think, are a little harder,” Council member Marilyn Meinke said. While the projects all have merit, “we just didn’t see much support on that ballot,” she said.

Council President Ralph Rauterkus suggested staff break down the projects from the larger categorizations in the sales tax plan. For example, “Sheldon development” can be broken into specific repairs — the heating, air conditioning and ventilation system or bathrooms, for example.

It will take a bit more time to rework the projects since the election was just this week. But there already are other options for some of the projects.

Riverfront work such as trails could possibly use Legacy grant funding, Planning Director Brian Peterson said. Work on Highway 61 aimed at improving pedestrian access, use and safety has some state money coming in the next couple years, Engineering Director Ron Rosenthal said.

Finance Director Marshall Hallock said the new Legislature could be more receptive to larger bonding bills that could benefit the city.

“Those odds may have just gone up a bit,” Hallock said of the likelihood of Red Wing projects being included.

In years past the council has hoped to lower the levy between its preliminary number, set in September, and the final one adopted in December. But this year that number might not shift as much as it normally does, Council Administrator Kay Kuhlmann said Thursday.

The City Council unanimously approved a preliminary tax levy amount of $14.15 million. Last year’s final levy was just more than $13 million.

But improvements to Xcel Energy’s Prairie Island nuclear plant will increase its share of the property tax burden so homeowners’ tax capacities will stay relatively the same, staff said.

It will have the same effect as about a 1.85 percent increase in the tax rate. That means the proposed levy would add about $11.68 for the year to a $175,000 home, for example, according to finance staff.

“If you’re ever going to raise the levy … now is the time,” Kuhlmann said. “It’s a pretty good bang for the buck right now.”

The council plans to adopt its final budget and levy Dec. 3.

During Thursday’s workshop, council members also discussed upcoming nuclear issues and budgeting for needs such as legal representation and lobbying.

“This is going to be a busy year for this,” Council member Lisa Bayley said.

They also touched the potential second fire station and plan to talk more at an upcoming regular council meeting.

The council also reviewed planned fees for coming years. One change is in the storm water fee, set to increase by $1.50 in 2013.

Similar fee increases are anticipated for the next few years, staff said. That is due to major infrastructure problems and work needed as well as dealing with regulations on water.

Council members still are weighing the decision of adding another police officer back to the staff. New Police Chief Roger Pohlman said he is looking into that need now.

Absent from the workshop were Mayor Dennis Egan and Council members Peggy Rehder and Mike Schultz.

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