Tax statement

While the Faribault City Council hasn’t yet approved the 2020 preliminary levy, council members have expressed serious concerns about an increase of more than 5 or 6 percent over 2019. (Photo illustration by Suzanne Rook)

Despite a significant increase in the size of the Faribault’s tax base, a 5% increase in state aid and largely stable health care costs, the city of Faribault’s current working budget would require a levy increase of nearly 8%. That’s doesn’t include personnel requests from the building maintenance and fire departments which could push the 2020 levy even higher.

City Administrator Tim Murray and council members agreed Tuesday that they’re not comfortable with the potential increase and are focused on cutting the budget line by line in hopes of getting a levy increase for next year to roughly 6% by the time added personnel costs are considered.

“Let’s take a percent and a half off of the levy, and see what we can do to add personal requests (within that),” said Councilor Royal Ross.

Murray said that the significant levy increases of the last few years have come largely as a result of increased personnel costs. After years of budget cuts and mostly stagnant wages following the 2008 financial crash, the city, prodded by public employee unions, has worked to play “catch-up” over the last few years to keep wages and benefits competitive.

Murray said he fears that costs are rising too much for a time of relative prosperity for Faribault, and that if the city doesn’t work to get costs under control now, it could be forced to make some very difficult decisions when times are leaner and funding sources decrease.

“We’re not on a sustainable path,” he warned the council.

Murray noted that health insurance costs for city employees have also been a major driver of the city’s spending increase. Last year, insurance costs rose more than 30%. This year, they’re rising by a much more modest but still significant amount of roughly 5%.

Mayor Kevin Voracek raised the possibility of reducing the city’s health insurance costs by introducing a more formal spousal cost penalty. Such a penalty, commonplace in the private sector, would see city employees pay higher premiums if they add their spouse to their health care plan.

City Human Resources Manager Kevin Bushard said that aside from retirees, very few city employees have their spouse on their coverage. However, Bushard said, that the city already has a form of a spousal penalty because when more people are added to a plan, the city covers less of the cost for each individual person.

Murray says he’s begun holding meetings with each city department in an attempt to find what can be reduced. However, Murray told the council because so much of the budget is tied up in personnel costs, many negotiated with unions, there’s limited opportunity to reduce spending unless it cuts personnel.

“There’s a finite number of line items that we can tweak,” Murray said.

City Engineer Mark DuChene touted the possibility of contracting out for the city’s seal coating program as one example of a potential efficiency. DuChene said that the city only uses the expensive equipment needed for seal coating during a few weeks of the year.

That would mean work could be done by contractors who do the job as efficiently and do everything they can to get the most use out of their equipment.

The council has until month’s end to approve a preliminary levy. That’s used to calculate estimated 2020 taxes, which are sent to property owners by the county in mid November. The final levy, which can’t be increased from the preliminary figure, doesn’t need to be approved until late December.

Reach Reporter Andrew Deziel at 507-333-3129 or follow him on Twitter @FDNandrew.

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