Perham city may need to cut $350,000 by 2011
Overtime pay freezes, shutting down the library a day a week, reduce summer rec funding and delay purchase of a new squad car-these are among the cuts facing the city of Perham.
And that's only "part one" of potentially more than $300,000 cuts between now and 2011.
Depending on the final action in St. Paul, Perham could be facing cuts of $50,000 to $138,000 in state aid--depending on where the governor and the legislature compromise.
Topping the list of cuts, that would be made this year:
-Delay resurfacing of the city recreational/bike trail, projected at $45,000.
-Delay purchase of a new squad car, $32,000,
-Cutting the Economic Development and Housing and Redevelopment Authorities by almost $7,000.
-$2,000 cut in the city's contribution to the summer recreation programs.
"This is for discussion purposes and is intended to start the conversation," wrote City Manager Kelcey Klemm in the budget reduction outline. "The items listed are in no way an exclusive list of all the potential cuts or possible revenue increases and other ideas."
A second tier of 2010 cuts, totaling some $65,000, was also outlined, under the worst-case scenario after the 2010 legislative session.
-A 2 percent cut to all departments for the remainder of the year, which would range from $4,490 to the police department to $295 for public works.
-Eliminating the recycling contract with Steve's Sanitation, which would save $23,500 over the second half of 2010.
-Eliminate the meter reading contract, a $7,200 savings for the rest of the year.
-Nearly $18,000 in cuts from the parks, Perham Area Community Center and the library.
The situation could be even uglier in 2011 when the city loses more than $60,000 in administrative fees paid by the Resource Recovery Facility incinerator operation. With the new, four-county joint powers arrangement, Perham would no longer be the administrative agent for the facility.
The city may need to kick in $14,000 toward Perham fire department retirement funds-because of the decline in value in the investments. Another $14,000 expense is anticipated to subsidize the purchase of a new ambulance.
If the financial picture doesn't improve in 2011, the city could consider eliminating the summer recreation contribution completely. Also on the chopping block, potentially, is the $10,540 allocation to senior citizen services.
Following are other areas that could be cut in 2011:
-Eliminate Perham Area Community Center contribution, $47,500.
-Eliminate contribution to history museum, $9,500.
-Consider contracting with the county for law enforcement, police services.
-Layoffs, reductions in hours in public works, administration.
Many of these cuts are "worst case scenario," but as City Manager Klemm noted in his report:
"Budget cuts are never a desirable task as the city values all of the programs that it funds, "but with decreasing state revenue and levy limit constraints, the city needs to reassess every service that is being offered and determine whether it is essential to the city's mission and/or whether there is a better way to deliver that service."
Gambling proceeds, utility surcharges may be new money sources for city
Can the city find "new money" in addition to cutting costs in order to balance the budget?
For example, if the city charged a street light utility fee to offset the cost of street lighting, $24,000 would be added to tax rolls.
If the city were to find new revenue sources to take the bite out of some of the cuts, it could be equally unpopular.
Another idea was to impose an electric utility franchise fee, which would collect an additional $20,000.
Lawful gambling could be another source of revenue for the city, but implementing a 10 percent surcharge on those organizations that sell pull-tabs in the city. The city could also impose a requirement that 10 percent of gambling proceeds be spent in city limits. As it stands now, there are lawful gambling license-holders that spend proceeds for purposes that are not connected to the city of Perham.