WORTHINGTON -- After months of discussion about how the city will deal with a nearly $440,000 proposed reduction in its 2010 Local Government Aid payment, and more recently, talk about how hospital sale proceeds will be spent, the Worthington City Council met for the first time on Thursday to begin its official work on the city's 2010 budget.
Finance Director Brian Kolander reviewed some of the city's planned expenses, including staff costs and attorney fees, election costs, replacement of computers and payments on the currently under construction City of Worthington Aquatic Center.
Just how the city will pay for the aquatic center -- what combination of taxes and hospital sale proceeds will be used -- will be a major question at upcoming meetings.
Kolander noted that another expense -- the fee charged by Nobles County to assess property in Worthington -- had increased by about 11 percent since last year, though the usual increase is about 5 percent.
Council members questioned the larger increase and Kolander said he would talk with county officials about the matter.
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Before they can move on to the finer points of the budget, council members will also need to decide whether to pay off a Worthington Public Utilities loan for city-owned land north of Interstate 90 in one lump sum; and whether to pursue an Economic Development Authority levy that would allow the city to contract with Worthington Regional Economic Development Corporation on economic development projects.
"I think if we settle those (issues), it gives us a framework," said Alderman Ron Wood, also suggesting that the city could realize savings by restricting its equipment replacement fund.
The city will also cut costs by reducing the amount it pays to Worthington Public Utilities for street lighting and considering more energy-efficient lighting options.
Another important factor will be the property tax levy: the state is expected to announce its levy limits this week, and the city will need to pre-certify its not-to-exceed levy amount on Sept. 14. Kolander said he expects the city's percentage will fall well below the maximum amount allowed by the state, and there will be a public meeting on the issue in December.
Interest from the hospital sale proceeds -- which has a long list of potential uses -- will also be an inevitable part of budget talks in coming months.
"We need to finish that hospital discussion," said Alderman Mike Kuhle.
Council members will aim to offset 60 percent (about $263,000) of the 2010 LGA reduction with hospital sale interest, while 40 percent will come through cuts to the current budget (the general fund budget for this fiscal year is about $6.8 million).
The city will finalize its levy and 2010 budget on Dec. 14. The next budget meeting is 6:30 a.m. Thursday at City Hall.
