ELY – The city’s budget committee released a proposed 2023 budget calendar Tuesday night and council members here were warned that difficult monetary decisions lay ahead in the coming months as the city works to set a maximum levy by the end of September and adopt a final budget and property tax levy by the end of the year.
“It has been a particularly hard year for the city in the sense that we had unanticipated and unbudgeted purchases including a land purchase by the Trezona (Trail), fire trucks, ambulance garage property, and increased fuel prices,” said budget committee member Paul Kess. “We area also negotiating (staff) contracts, and just general inflation. It is going to be a challenging year for our budget.”
A nearly two-hour budget committee meeting was held Monday night as council members and Assistant Treasurer Dan Smith discussed the challenges of balancing the budget next year.
According to minutes from the meeting, the city’s Capital Project fund decreased by more than $2 million in 2021, and only about half of that spending was anticipated. The other decreases, according to Smith, can be attributed to airport projects, unbudgeted projects and budgeted project cost over-runs.
It is anticipated that the Capital Projects fund will incur deficit spending for 2022, Smith said. He is preparing a summary of recommended transfers from the Airport, Economic Development Authority and General funds to the Capital Projects Fund to cover the deficit.
The city fuel budget for 2022 alone is estimated to be more than $28,000, or 32 percent, over the budgeted amount of $88,400.
“As many of you are aware, we have a fund balance policy on assigned balances set at 50 percent to ensure that we don’t have to do tax anticipation bonding, like we’ve done a decade and a half ago,” said Clerk-Treasurer Harold Langowski. “With the fund balance transfers due to capital projects, our goal is to always be above our fund balance policy. We will make slight adjustments in the next month.”
Recently, unanticipated expenditures for the city included $150,000 toward the Ely Ambulance Service property purchase and $25,000 to get a recently purchased used pumper truck for the Ely Fire Department ready to use. On the Budget Committee’s recommendation, the council also approved spending more than $7,500 for a desk and office furniture for the Ely Police Department.
“And the new Trailhead Building project will add another one or two percent to our levy,” Kess added.
The budget calendar calls for department heads to submit budget worksheets to the treasurer by Aug. 8. The Budget Committee hopes to present a preliminary 2023 budget by Aug. 15. Reviewing requested budgets and setting spending targets for next year should be done by Sept. 19. Council members plan to conduct a study session on Oct. 25 to discuss the proposed budget for next year. The Truth in Taxation public hearing is scheduled Dec. 6.
Other business
In other business, the council:
Approved a recommendation from the Budget Committee to deny the distribution of federal American Rescue Plan funds to the Boundary Waters Care Center because the request did not meet the guidelines.
Approved conditional employment offers to Daniel Mooers and Ryan Mahoney for the open patrolman positions on the Ely Police Department, pending background checks and psychological evaluations. Chief Chad Houde said he anticipates the new hires to start by early October.
Approved a recommendation from the Airport Committee for a quote from Carlson Co. for a maintenance building heating system for $14,190.
Approved an in-kind request from the Chamber of Commerce for the 2022 Blueberry/Art Festival.