FAIRMONT– A lengthy conversation surrounding the preliminary 2023 budget was had by the Fairmont City Council during Monday evening’s meeting.

City Administrator Cathy Reynolds said a budget workshop was held back in August and during that time staff had taken the philosophy of maintaining existing services and infrastructure and not looking to expand services, infrastructures or numbers of structures, but focus on maintaining what they have.

“We looked at our capital budget and worked to keep it flat going into 2023,” Reynolds said.

She said one change was made in the budget since the workshop, in addition to the council’s addition of work at the Sylvania Park Bandshell, and that was to adjust the debt service levy.

“We added $50,000 to work toward increasing our street improvement program and the funds available,” Reynolds.

City Finance Director, Paul Hoye, then went through other details of the budget. He said of the 7.6 percent levy increase, 6.7 percent is for the general fund.

He said total revenues are up just over 5 percent, or $480,000 in 2023.

As for the general fund expenditures, Hoye said some things that will affect all departments are wages, benefits and COLA. In addition to those, there will be larger increases in the police department as work comp expenses are going up $42,000 because the insurance, which is through League of Minnesota Cities, has increased rates.

“For public works, our budget is increasing $227,000. Of that, $65,000 is for our city-wide clean-up program and we did also increase our budget for our tree and leaf site for 2023,” Hoye said.

For the parks and recreation budget, there is a slight increase in the budget for covering costs related to the Emerald Ash Borer, which was recently detected in Fairmont.

As for transfers out, Hoye said there are a few capital projects in the capital budget that they’re looking at funding out of reserves. One is city hall security updates and accessibility, at $475,000, and Sylvania Park Bandshell upgrades for $165,000.

“Overall expenses without transfers are up just about 4 percent,” Hoye said.

Not a lot of changes will be made in the special revenue funds, which include economic development, SMEC building, airport and lake restoration. Hoye said they made an increase in airport fuel sales but that’s about the only change in revenue sources in special revenue.

Local option sales tax is at about the same as last year, at $975,000.

Moving to debt service funds, on the revenue side for taxes, the debt service levy was increased by $50,000, as Reynolds said, which will be designated for street improvements.

For capital projects, there’s $4.6 million in the 2023 budget but Hoye said a lot of the projects are being funded by other sources outside of the levy.

“In general govern ent there’s $1.2 million, of that, there’s $724,000 in there for purchasing land, the 39 acres on county road 39 by interstate 90. The city currently has an option on that,” Hoye said, adding they would use the land for future development.

General government also includes the city hall updates which were previously discussed. There’s $179,000 set aside for the library in capital projects, the majority of which Hoye said is for the roof as per the facility assessment that was done. The county is paying for 50 percent of the roof repair.

“With streets and engineering, the largest piece of equipment we have there is $140,000 for a new paving machine. We had those funds in our 2022 budget and carried it over,” Hoye said.

Under Aquatic Park and parks, of the $2.6 million, the majority is for the Gomsrud boat landing and parking lot improvements. The majority of it, $1.275 million will be coming from the liquor store and $850,000 from the local option sales tax. Some of the money is for the first phase of the Sylvania Park Bandshell rehab and a small portion for improvements at the skate park.

Council Member Randy Lubenow asked about the money set aside for city hall updates for security and accessibility.

“I still don’t know what that’s for. We have an elevator. It seems accessible,” Lubenow said.

Reynolds said they’ve had conversations about security for some time and that it’s a priority for staff safety. Accessibility has also been an issue at city hall as the restrooms are not handicap accessible and the doors to council chambers are not accessible, nor are the doors to utility and billing.

“The goal is to work on improving accessibility in the building and improving the security and safety for our employees and everyone when they come into the facility,” Reynolds said.

She said part of the money will also be used to modify office space upstairs to accommodate staff.

Lubenow asked why they can’t use the SMEC building for city offices. Reynolds said she’s aware it’s been mentioned as a possibility but a lot of renovations would need to be made in the SMEC building to turn it into a city hall as it lacks technology to turn it into a council chambers.

“It’s not cheap or easy to run all of the electrical wires that would be needed to be ran through there to create space to build offices… $475,000 to renovate and do some work here, you’d probably double that to make the SMEC building into something that could potentially be used as a city hall,” Reynolds said.

Lubenow asked what the plan is for the land the city would like to purchase for possible future development. Reynolds said they’ve had numerous people look at the land.

“It gives us something to incentivize to get businesses into the community. When the EDA doesn’t have anything in its position to utilize to incentivize… this gives us something to use to incentivize,” Reynolds said.

Council Member Britney Kawecki said she agreed with Lubenow on his concerns about the purchase of the land. She cited concerns that the property valuation might change.

“I feel that the industrial park purchase should be delayed because as Mr. Lubenow said, there’s plenty of land… why do we as a city want to be land owners? Why do we want to be landlords?” Kawecki asked.

She also said while she thinks city hall needs security, she thinks they need to be more mindful of what they’re spending.

Council Member Michele Miller said it’s not their job as council members to micromanage city staff.

“We’re purchasing the land by the interstate because businesses want that. I don’t think it’s a bad thing for us to go and purchase that land. We might get two or three businesses that want to go out there,” Miller said.

She said she felt like while discussing the budget, they were getting too nitpicky.

Reynolds pointed out that the budget workshop, which was in August, is the time for council to go over questions they might have because at that time, capital projects, etc. are gone over.

“We take the input that comes out of that workshop and compile it into this proposed budget that we’re presenting tonight. This has not modified since then and you’ve had this since that worksop to look at and review it and provide us some feedback,” Reynolds said.

Council Member Bruce Peters said instead of putting just an additional $50,000 toward roads, he though they should put $100,000 since the biggest complaint he receives from citizens is about roads.

Hoye said an additional $50,000 would increase the levy from a 7.6 percent increase to an 8.4 percent increase and the tax rate would decrease just under 6 percent.

Peters made a motion to adopt the proposed tax levy for 2023 with the addition of $50,000 for the debt service. The motion passed 3-2 with Kawecki and Lubenow voting no.

Peters made a motion to accept the proposed 2023 budget with he additional of $50,000 for the debt service. The motion passed 3-2 with Kawecki and Lubenow voting no.

The tax levy and budget will be brought back to the council for adoption at the Dec. 12 council meeting.

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