August 10th Work Budget Work Session

The latest Budget proposal has lowered the proposed tax increase to 11.18% from the over 14% increase. This is because Local Governemnt Aid is higher and two debt funds had a small surplus.

Tonight's budget schedule will have presentations from the Liquor Store, Police Department and Public Works departments.

I have sent a number of questions to staff to be prepared to answer tonight. These center on the Liquor store budget and transfer amounts. Municipal liquor stores exist to help keep property taxes lower. The amount of profit transferred to the General Fund has remained the same for the previous 4 years even though the operating income has increased 76%.

The extra revenue is kept in a cash account. It is important to keep a percentage for future repairs and other expenses. This number should never exceed 25% of total profits. In 2005 it was 60%. This has led to a cash account over $750,000.

The other accounting issue with the Liquor Store is that City Administrative staff cost are run through the store at a high percentage. 38% of several high cost administrative positions are charged to the liquor store. This shows inflated cost to the liquor store and makes Isanti's Administrative cost look low. This is however not true. We need to reform this budgeting process so we can compare apples to apples and truely judge Isanti's administrative cost.

This concerns me because a large portion of these funds are being looked at to fund another City project which has nothing to do with the liquor store or lowering City Taxes. I have to reiterate my position that if the City collects the funds they will find a way to spend it.

This is the same point on the General Fund. The city collected $350,000 in unbudgeted funds for 2006. This money is continually being spent or asked to be spent on many differing projects. I want the major portion of this amount put forward to the 2007 budget which will help lower property taxes.

The Liquor store is quite profitable and well run. The City needs to receive the full benefit from this operation.

If time allows, there will be general budget discussion. I will at that time present my budget changes to lower Isanti's Property Taxes by 7%.

The meeting is at 6pm tonight. There will be a 10 minute presentation and funding request from the Isanti County Historical Society. Then we will move into the budget presentations.