Austin gets good audit review, but many budget decisions await
The Austin City Council looked back on some good news from its 2016 finances and ahead to 2018 budget decisions earlier this week.
The City Council received positive news about the 2016 audit report, which was compiled by CliftonLarsonAllen LLP.
According to Kimberly Hillberg, principal of CliftonLarsonAllen LLP, the city had a clean report with no discrepancies, such as control issues or deficit fund balances, found in 2016.
The report indicated that Austin had an unassigned fund balance of 42 percent in expenditures in the general fund, which was down from the previous year. Revenues of the general fund came within one-half percent of the budget. Roughly 64 percent of the general fund expenditures went toward public safety and streets and highways.
Hillberg stated that Austin is categorized in a peer group of cities with populations ranging from 20,000 to 100,000. Recreation funding in Austin is higher than other cities in the peer group, while debt service expenditures are lower than other cities in the group.
In a letter to the mayor and the council, Director of Administrative Services Tom Dankert listed five issues with the 2018 budget that will need to be considered.
The first issue was the tax levy. According to Dankert, Austin’s current tax levy raises $5.3 million. He pointed out that there is currently no limit to the amount at which the tax levy can be set, but an increase can’t be made after Sept. 30. Austin currently ranks 224th out of 230 in property tax rates for Minnesota cities with a population over 2,500.
The second issue involved staffing, particularly if the council wants to add services or increase employees in various departments. According to Dankert, 62 percent of the General Fund budget is spent on wages and benefits and each additional full-time employee adds about $65,000 to $75,000 in wages and benefits. The council agreed to allow the heads of city departments make their requests for review.
The third issue involved other agencies. Dankert stated that there are no plans to invite other agencies to receive city funding, though that may change should the majority of the council request it.
The fourth issue was capital requests. Dankert asked the council to consider what projects, if any, they would like to fund and if there are any Vision 2020 projects for which funding should be reserved. He noted that building fund money for City Hall and the Jay C. Hormel Nature Center has already been allocated through 2017.
The final issue concerned the budget review process, particularly concentrating on the global operations and activities of the city versus a line-by-line review of all budgets.
Dankert also gave the council a proposed budget timeline, which calls for the council to adopt the tax levy and budget by Dec. 18. The timeline also includes a truth in taxation hearing for residents to hear how the money will be spent, scheduled for sometime in early December.
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