2012 Shorewood Budget

7/26/11

Shorewood's Council started 2012 budget discussions in a 7/11 work session and continued last night (7/25) in another work session. The Insider is gathering details, but can report the following.

City staff presented a budget draft that shows a deficit of over $100,000. However, to their credit, they showed no increase in the property tax levy. So, Council is challenged with finding a way to fund the deficit (from reserves or other sources), cutting expenses from the draft budget or a combination of the two. Or, Council could decide to raise taxes.

The Insider has reviewed the 2010 audit report that was on the 7/25 council agenda for approval. (See: http://weblink.ci.shorewood.mn.us/weblink8/0/doc/154369/Page1.aspx#). On page 4 of the Management Letter, the auditors note that $155,000 was budgeted to be spent from reserves in 2010, but was not. The result was that reserves actually went up in 2010 (by $126 thousand) and now stand at more than $400,000 above the 55% of expenses that the City's policy mandates as a minimum reserve. The auditors recommend at least a 50% reserve.

So, the City has plenty of reserves to use to balance the 2012 budget without even getting close to the minimum reserve level. The Insider asks Shorewood residents: Do you want to spend down reserves to the policy level, avoiding a tax increase (as has been the case for the last 3 years); cut the budget and leave reserves high; or maybe use the reserves for new projects and have to cut the budget and/or raise taxes?

In any event, it's your money!

Happy Reading!
The Insider