By transferring $408,000 from the city’s general fund, the Merrill Common Council passed a 2014 budget Tuesday night with no increase to the tax levy.
The council had been looking at a 7.1 percent tax levy increase, but a week prior had voted to tap into the general fund to offset the levy hike. The $13,932,212 budget will require a tax levy of $4,877,448, exactly the same as the 2013 levy. The mil rate will remain at last year’s $12.51 per $1,000 of assessed value, or $938 per $75,000.
The increase in the budget is all in debt service. The city borrowed more than $5 million in 2013, with $3.5 million of that being for the new fire station.
Alderperson Anne Caylor, who had made the motion to transfer money from the general fund, said the city can’t continue to balance the budget that way. She said the council will start looking at the 2015 budget in January.
Alderman Chris Malm noted that the council normally doesn’t see the budget until later in the year.
“This will be the first time the council will be involved that early,” he said.
Alderman Rob Norton, who voted against the budget, said the city shouldn’t be depleting its general fund. A healthy general fund, he said, is a reason the city was able to receive a favorable bond rating.
“This is not a way to bring the city forward,” he said.
The city received an “A” credit rating in 2013 from Standard & Poor’s. Having an adequate undesignated general fund reserve is one of the key fiscal evaluation criteria for bond rating purposes, noted Finance Director Kathy Unertl.
Unertl noted that the city’s tax levy supported debt service for 2015 will be similar to 2014, which means the city will again face a $400,000 levy increase for 2015. Under the current debt payment schedule, the city won’t see a significant reduction in debt service until the 2021 budget.