Council approves 2016 general fund budget, directs 1% expenditure reduction and adds $255,000 transportation aid to CIP

The Superior Common Council on Oct. 6 adopted a balanced 2016 general fund operating budget, approved a council amendment to reduce non‑debt expenditures by 1 percent and accepted an unanticipated $255,000 increase in state general transportation aid for the city’s capital improvement program.

Finance Director Vito told the council the $255,000 was new revenue that could be applied to the capital improvement program (CIP) for street maintenance; he warned that putting the money in the general fund could push the city over the state’s expenditure restraint program threshold and cost the city about $300,000 in state funding.

Why it matters: The 1 percent cut — proposed by Councilor Sweeney and estimated to generate roughly $260,000 — was promoted as a preemptive measure to reduce longer-term deficit risk. Moving the transportation-aid money to the CIP preserves compliance with state expenditure limits while funding immediate street maintenance needs.

Key votes and motions
Councilor Sweeney moved an amendment to cut general fund operating expenditures by 1 percent, excluding debt service; the council approved that amendment. Finance staff estimated the 1 percent reduction would generate approximately $260,000 that would flow into contingency.

Another separate motion to eliminate a proposed clerk-typist position from the general fund budget was considered; the council ultimately approved the elimination and directed the associated funds to contingency. The position’s annual cost was discussed in the meeting as roughly $54,000.

The council then voted to approve the general fund operating budget with the 1 percent reduction and to place the $255,000 in general transportation aids into the CIP’s street maintenance line item. Councilors discussed but did not adopt any levy reduction; staff advised that reducing the levy could create larger budgetary problems in future years.

CIP and other items
Councilors considered referral of the CIP to the Committee of the Whole for department head presentations; that referral failed and the council adopted the CIP with the updated transportation-aid revenue added to the street maintenance program. Finance staff noted the transportation aid allocation is based on a six-year rolling average of street spending and that additional street spending earlier had increased the city’s allocation under the state formula.

Grants and other approvals
Separately during the meeting the council approved a FEMA grant award for the fire department of $19,091 to purchase wellness equipment; the grant requires a 10 percent city match of $1,909, and council approved accepting the award.

Ending: With the votes taken, the council approved a balanced 2016 budget, moved one-time transportation aid into the 2016–19 CIP for street maintenance, and adopted a modest expenditure reduction intended to increase near-term contingency while preserving future compliance with state funding rules.