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Dramatic ideas for trimming BE budget

By Staff | Nov 21, 2010

Rick Scholtes

Two Blue Earth City Councilmen came up with dramatic ways to cut the 2011 city budget.

One dealt with changing the way the budget is developed. The other was to slash salaries of nine of the city’s employees.

Newly appointed councilman Rick Scholtes presented an Excel spreadsheet of a new 2011 budget proposal.

“I modeled this after a business budget, instead of the standard government way,” Scholtes says.

The councilman took the actual expenditures of the last two years, in each budget line item, averaged them and added three percent.

“Before, we just took the previous year’s budgeted numbers and adjusted them for the new year,” Scholtes explains. “It is easy to mess up a budget using estimated round numbers. These are actual expense numbers.”

With Scholtes’ new way to run the numbers, his budget is nearly $143,000 lower than the current proposed 2011 budget.

“Instead of still having to cut $80,000 from the budget, even with a three-percent levy increase, we will be able to have $60,000 in reserve with this one,”Scholtes says.

Both versions of the 2011 budget include local government aid (LGA) payments from the state.

“The state says our LGA is going to be increased by $155,000,” says City Administrator Kathy Bailey. “Of course, I still think they are going to cut our LGA in May when they have to pay back borrowed money from school districts.”

Councilman Dan Brod also had a presentation on a way to cut the budget.

“I think we can cut the top nine employees’ salaries by 10 percent each,” Brod says. “It would save us $47,500.”

He called these cuts ‘real’ dollars, as opposed to just adjusting numbers in budget line items.

“In business, if you have to make cuts, you have to cut real dollars,” he says.

The nine employees include City Hall workers, police chief, librarian, pool manager, liquor store manager and public works director.

“These nine salaries total over a half million dollars,” Brod says. “I know we have good people working for us, but they should still be able to live on these salaries (after a 10 percent reduction).”

Brod called the wages high for Blue Earth.

“We have a secretary making $40,000,” he says. “That is a lot of money.”

Councilmen Les Wiborg and John Huisman agreed with the idea.

“The League of Minnesota Cities says all small cities are going to go broke by 2015 if policies are not changed, and this is one we can change,” Huisman says.

Brod says it would be better to cut some salaries than to cut some employees.

Councilman Scholtes says if such a plan is implemented, he would want it to be fair, and across the board, and the unions would not agree to such a proposal.

“I don’t want to do it to the bottom wage employees,” Brod says, “Just to the higher salaries.”

No action was taken on the issue, as it was discussed as part of a budget work session.