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Preston anticipates reduced aid

Fri, Dec 19th, 2008
Posted in Government

Preston, like cities and counties across the state, is bracing for bad news come December 26 when a second payment of Local Government Aid (LGA) from the state is due. Representative-elect Greg Davids was on hand to discuss the state's revenue shortfall at the city council's December 17 meeting.

Davids explained that the last time a huge deficit faced Minnesota in 2003, there was money from the Tobacco Settlement to help with the shortfall. The state expects a $426 million dollar shortfall for the budget period ending June 2009. It is also estimating a $4.8 billion dollar deficit for the next two year period ending in 2011. Mr. Davids, claiming he is an optimist, suggests that this forecast is overly optimistic as it fails to account for inflation and probably over estimates revenue from capital gains.

Davids maintained that when "LGA is cut it is in affect a tax increase." He says the LGA payments are a "big bucket" of money. Davids is concerned about decisions made by the legislative leadership and the governor without the full legislature.

City Administrator Joe Hoffman said that he is optimistic. He said the city is expecting a payment of approximately $270,000 on the 26th, which will reimburse money the city has already spent in the last six months. He explained that the League of Minnesota Cities estimates the loss for Preston could be as little as $13,000 to as much as $70,000 with this second payment. The most pessimistic possibility is that the payment would be entirely eliminated. Hoffman said some of the immediate loss would be made up by reserves. He stresses that with the expected long term cuts to the LGA, the state cannot be imposing levy limits on cities the size of Preston.

Hoffman said that longer term LGA cuts will result in cuts in capital projects to start with. He asked council members to contact legislators. He was concerned about state mandates for renewable energy. Hoffman warned that they will affect the consumer's utility bill.

Davids agreed that the state will need to back off the levy limits if the LGA is cut in the next two year budget period. He said that the state budget could be balanced with a straight 13% cut across the board. However, this would not work as bond payments due cannot be cut and other areas including education and nursing homes may not be able to sustain themselves. Davids left saying "we're all in this together and we have to make it work."

Garbage Ordinance

A modification to the Garbage Ordinance had been proposed due to the recent issue with the burning on the David Wilson property. Under section 50.26, Required Destination of Refuse, language has been changed to read, "Construction debris shall be hauled to either the Fillmore County Resource Recovery Center or a permitted demolition landfill." Hoffman stated that the minor change should clear up any confusion as to the proper disposition of construction debris. A permit will need to be obtained for home removal within the city. The modification was approved.

Andy Bunge addressed the council to update the council on the burning on the Wilson property. The properties that had the two demolished homes on them were purchased by Bunge. He admitted that they were in violation and had been noticed by the Minnesota Pollution Control Agency. The debris has been dug up and disposed of properly. They were also levied a small fine.

Bunge made it clear that David Wilson did have a burning permit for burning brush and trees. He said that the Kaase house burned accidentally as it was dumped on the ash. The Strahl home was just buried and not burned according to Bunge. He said that some of the information reported was wrong and that debris was only hauled to the Wilson property on two days not over a couple of weeks.

Bunge pointed out that some businesses in the country recycle old homes and create usable energy from the debris.

Hoffman said that if a citizen wants to burn within the city limits, the permit should be obtained from the fire department.

Other Business

• The city's final levy amount of $631,731 was certified. This is a 1.76% property tax rate increase for 2009.

• The final payment for the tennis court of $2,369.80 to Scheevel and Sons was approved.

• Modifications were approved for the 2009-2011 Preston Public Employees Association contract.

• Hoffman and Mayor Kurt Reicks thanked outgoing councilman Heath Mensink for his years of service to the city.

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