The Superior Finance Committee discussed retooled budgets for 2022 during a special meeting Tuesday, Sept. 28.
The changes were proposed in response to a reduction in pipeline terminal tax revenue of $275,000 last year, a dip which would leave the city with $5 million less to spend over the next five years.
The proposals, presented by Mayor Jim Paine, included having the city bond for $1.5 million and use federal American Recovery Plan Act money for some expenses normally covered under the city's Capital Improvement Plan.
For example, city funding for parks would be reduced by $200,000 per year over the next five years, but be covered by $1 million in federal funds over that same time frame. The city has already received half of its $17 million allotment of federal funding, and will receive the second half in summer 2022, according to the mayor's chief of staff Nick Raverty. The funds must be allocated by Dec. 31, 2023, and spent by Dec. 31, 2026.
The mayor proposed using a hefty chunk of the federal dollars for the Connect Superior initiative, a city-owned fiber optic network. Raverty said that portion of the funding could be $8-$9 million. The federal legislation was passed in the spirit of mitigating the consequences of a future pandemic, Paine said.
“By far, the biggest is improving internet access. That’s the one thing that absolutely everybody that went through the pandemic endured,” Paine said. “All of us, from in some cases the youngest of children to the oldest of senior citizens, changed their relationship with the internet over the course of 2020.”
There was a rise in crime and gun violence associated with the pandemic, making public safety improvements eligible for funding. Paine proposed fully converting all Superior Police Department squads to hybrid vehicles within the next five years using federal dollars, which would also complete the take-home squad program.
“It really does mitigate some of the things that we’re taking out and I assume the very first question is, even if we’re putting that money back in with grant funding over the next five years, what happens in year six,” Paine told the committee. “And to a certain extent, some of those are questions for next year when year six comes in, but I have at least some of those answers.”
The draft budget included $500,000 for the Superior Police Department's new community response specialist to provide the tools to address crisis situations, and would provide $1.25 million to nonprofit agencies whose goal is to fight poverty and homelessness in the city.
"As most folks know, not only poverty in general, but actual homelessness dramatically increased during the pandemic," Paine said. "And so I think we need to make substantial investments into mitigating that problem. That’s been something we’ve been struggling with all summer and so we want to just kind of expand our tools."
Other budget tweaks
There would be a general reduction in building and facilities funding under the proposed budget. A $2.3 million East Fifth Street reconstruction project, which was not included in the original proposal, would be added.
Council President Tylor Elm asked why the city should take on more debt for the street project when they are already looking at a shortfall of nearly $5 million.
"It shouldn't have been deferred in the first place," Paine said. "We were given an opportunity to redo it. It should have been in the initial budget. We do our projects, and we generally do them on time."
Sidewalk funding for non-Community Development Block Grant areas was reduced, and general street maintenance was pulled back to $1.25 million.
Funding for Barker's Island Marina and Nemadji Golf Course, a $2 million investment over five years, would be maintained.
"The idea is over the next five years we want to make both of those organizations as fiscally stable as possible so that when we start planning for 2027, we start thinking about funding them substantially less, in the case of the golf course maybe not at all," Paine said, because they would be able to do their own bonding.
A parallel taxiway for the municipal airport, which is 95% funded from the Federal Aviation Administration through the Bureau of Aeronautics, remained in the budget, and Paine proposed spending $500,000 out of the city's surplus funding for public art.
Councilor Brent Fennessey disagreed with spending surplus on projects like public art at a time when the city was looking at bonding for $1.5 million.
"Last year we all went through the pandemic. We survived it," Fennessey said. "This is our pandemic."
The proposed budget would add an assistant fire chief position, funded in part by $200,000 in revenue from two tax increment districts — one that recently closed and another that is poised to close.
Paine would like to expand the urban forest, as well, which would cost roughly $100,000.
Councilors asked what they can expect for future pipeline terminal taxes. Paine said a state bill is being discussed that would protect the baseline amount of pipeline tax the city currently receives. The committee members discussed looking at other areas for revenue and noted that the city will make its last payment on the Government Center construction in 2022.
The city council is facing a time crunch to approve the 2022 budget.
Another special finance committee was scheduled for Friday, Oct. 1, to hash the budget out before bringing it to the council floor on Tuesday, Oct. 5.