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Commission Cuts Mill Rate, Budget To Go Up

It was something to see. Three City Commissioners working to cut spending and the administration helping.

The Manhattan City Commission approved a 1 mill cut in the proposed 2003 City Budget. The proposed Budget was $57,094,148, the one mill cut will be $250,000. The new Budget will come in at about $56.7 million up from $55,247,357 in 2002.

Mayor Ed Klimek and City Commissioners Mark Taussig and Brad Everett worked with City Manager Ron Fehr to approve the change.

Last year the three commissioners cut the Budget from $59.1 in 2001 to $55.2 in 2002 and the Free Press reported that with the changes it was hard to tell if the Budget had dropped. It did.

Here is a memo given to the Commission on the Budget:

BACKGROUND

The City Commission has held several discussions regarding the Proposed 2003 Budget. The most recent discussion was at the July 9, 2002 Work Session. At the Work Session, City Administration presented approximately $800,000 in cuts. Those cuts have been incorporated into the Proposed 2003 Budget.

DISCUSSION

The Proposed 2003 Budget includes $57,094,148 in total expenditures, which is an increase of approximately $1.8 million, or 3.3% from the 2002 Budget. The General Fund budget, which supports core City services, is proposed to only increase at a rate of 1.7% over 2002. With the cuts made to date, the proposed increase to the mill levy has been reduced from over 5 mills to 1.855 mills.

Attached is a comprehensive budget transmittal which details the revenues, expenditures and major initiatives to be undertaken with the 2003 Budget. Also attached is the updated 2003 Capital Improvements Program with summary information for 2003-2008.

At the meeting, the City Commission will first need to hold a public hearing. Then, the Commission may consider first reading of the 2003 Budget Ordinance. Also, City Administration is in receipt of a request from the Manhattan Convention and Visitors’ Bureau (CVB) for additional budget authority from the 2002 Budget (see attached letter). The CVB is requesting that their funding be increased to $467,268.70 for the current year, over the previously-allocated $410,000. There is adequate revenue in the Tourism and Convention Fund to accommodate this request, but it will require a budget amendment for the 2002 Budget. So, the Commission should consider first reading of an ordinance amending the 2002 Budget for the Tourism and Convention Fund from $482,000 to $540,000.

Also attached are the 2003 recommendations of the Special Alcohol Committee. One-third of the alcohol tax monies which the City receives must be dedicated for specific prevention, treatment and educational programs addressing alcohol and drug abuse. The Special Alcohol Committee accepts proposals for the use of City funds annually and provides recommendations to the City Commission. Although no formal presentation is prepared, members of the Special Alcohol Committee will be on hand to answer any questions the Commission may have. The recommendations of the Special Alcohol Committee have been incorporated into the 2003 Budget as proposed. The City Commission should provide direction if it desires any changes to the recommendations.

ALTERNATIVES

It appears the Commission has the following alternatives concerning the issue at hand. The Commission may:

1. Conduct a public hearing, approve first reading of an ordinance adopting the 2003 Budget, approve first reading of an ordinance amending the 2002 Budget, approve Resolution No. 071602-A adopting the 2003-2008 Capital Improvements Program, and authorize the Mayor and City Clerk to execute contracts with the agencies receiving Special Alcohol funding.

2. Conduct a public hearing, and modify the ordinances or resolution to meet the needs of the City Commission.

3. Conduct a public hearing and table the issue.

RECOMMENDATION

City Administration recommends that the City Commission conduct a public hearing, approve first reading of an ordinance adopting the 2003 Budget, approve first reading of an ordinance amending the 2002 Budget regarding the Tourism and Convention Fund, approve Resolution No. 071602-A adopting the 2003-2008 Capital Improvements Program, and authorize the Mayor and City Clerk to execute contracts with the agencies receiving Special Alcohol funding.

POSSIBLE MOTION

Approve first reading of an ordinance adopting the 2003 Budget, approve first reading of an ordinance amending the 2002 Budget regarding the Tourism and Convention Fund, approve Resolution No. 071602-A adopting the 2003-2008 Capital Improvements Program, and authorize the Mayor and City Clerk to execute contracts with the agencies receiving Special Alcohol funding.