Blaine City Council is facing tough decisions this fall as it decides what essential services, including multiple staff positions, it needs to cut to save the city from eating into its reserves.
Council reviewed the city’s proposal for the 2024 general fund during a study session before the September 25 meeting. These budget cuts are much more severe than those made during the pandemic because those reductions whittled the budget to essential services, while these will cut essential services, city manager Mike Harmon said during the meeting.
“We’re beyond the point of having a budget where we have things we can’t afford,” he said. “We have a budget that’s providing a level of service that we can no longer afford.”
The city had an 11 percent increase in expenditures from 2021 to 2022, and then another 12 percent expenditures increase from 2022 to 2023. If council adopts the drafted 2024 budget, the city would remain in a deficit of $366,000, Harmon said.
“We have a structural problem,” Harmon said. “Simply said, our expenditures are outpacing our revenues.”
The city’s financial problems have come from a combination of issues. High inflation has increased salary and wage expenses, especially in the general fund where most are located. The city is also transferring money from its general fund to the street fund, which is hurting because the city’s gas tax revenues are down. While revenues are not keeping pace with expenditures, the city is not receiving the Covid-19 stimulus that kept the budget balanced during the pandemic.
The city has recommended cutting about 10 percent of its staff, or 6.5 of its 65 staffed full-time positions, to balance the budget. The city also plans to cut travel, technology, supply and other expenses to decrease expenditures. Some vacant positions won’t be filled and other positions could potentially change departments, such as the planner 1 position moving to the Blaine Police Department as nuisance enforcement.
Along with cuts, Harmon said the city suggests council raise the property tax levy by 1 percent, water rates by 17.5 percent, stormwater rates by 5 percent and wastewater rates by 1 percent.
The drafted 2024 budget would plan for the general fund having a surplus of $6,400, the street fund having a surplus of $14,000, the electric fund having a surplus of $35,000 and the water fund having a surplus of $750. The stormwater and public works administration funds would be balanced, while the wastewater fund, which has significant issues, would have a $423,000 deficit. The wastewater fund is having problems mostly because of increased salaries and wages, as well as higher bond and loan payments and sewer repairs, city finance director Daniel Heverling said.
Blaine Municipal Court administrator Raylene King asked council to consider not cutting a half-time position because it would reduce the court’s service level when the court already has the second highest workload for small cities. The cut could slow the court’s ability to meet filing requirements, return calls from people needing help and respond to public records requests, among other concerns.
“If we go below two full-time employees, we will fail meeting our constitutional and legal requirements,” King told councilmembers. “Reducing the court to two full-time employees will put the city of Blaine in a worse financial position and one in which it cannot serve its citizens with the justice they deserve to be given by local government.”
Councilmember Kerena Higgins later raised concerns that the city could face legal liability and asked for more opportunity to discuss the court position.
The city could add a half-time employee back into the budget, but that would require making cuts in other areas, such as technology improvements that have long been needed, Harmon said.
“There are no good cuts left,” he said. “These departments have a fairly bare bones budget”
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