City council passes 2014 levy, budget

MARSHALL – Members of the Marshall City Council passed a levy and budget for 2014, but it was accounting policy questions that made up the bulk of discussion at the council’s regular meeting Tuesday night.

Council members voted to approve a $3.2 million levy, as well as a budget that allowed for about $10.41 million in revenue and $10.412 million in expenses. But during discussion of the budget, council member Glenn Bayerkohler said he had some concerns regarding the city’s accounting practices for certain funds in the budget. He moved to amend the budget, by classifying the city’s amateur sports center and MERIT Center funds as enterprise funds.

“Enterprise fund” is a designation given to funds where fees are charged to consumers for a service or product, Bayerkohler said. For example, the city of Marshall already classifies its municipal liquor store and wastewater treatment funds as enterprise funds. Enterprise funds are meant to be self-sustaining and use accrual accounting, which gives a clearer picture of revenues and expenses, Bayerkohler said.

Bayerkohler argued that it would be more appropriate for the sports center and MERIT Center to be enterprise funds. It would also give them more transparency.

“Citizens have a right to know how their money is being spent,” he said. Bayerkohler added that there are other Minnesota cities, including Mankato and Eagan, that use enterprise accounts for their civic centers.

“My question would be the timing,” said Marshall Mayor Bob Byrnes. Neither the planned sports center nor the MERIT Center expansion will be operational in 2014, Byrnes said.

Marshall City Administrator Ben Martig also expressed concern about the timing of Bayerkohler’s motion.

“This is a complete surprise tonight,” Martig said.

Martig said enterprise funds have pros and cons, but he and city staff weren’t prepared to go over them at Tuesday’s meeting. The council needed a chance to get more in-depth information before taking action, he said.

Bayerkohler said he would be willing to withdraw his motion, with the understanding that the council will address the issue at a future work session. He then made a motion to cut the amount of money transferred from the city’s wastewater treatment and surface water funds into the general fund. The motion called for such transfers to be phased out over the next three years. Fees collected for vital services like wastewater treatment shouldn’t be used to cover general fund expenses, Bayerkohler said.

Council member Mike Boedigheimer said the timing of the proposal was “out of line.”

“We have been talking about this budget since July,” Boedigheimer said. “We’re not going to do this at the last minute.”

“It’s never too late to make budgetary changes,” Bayerkohler said. He added that it wasn’t his intent to spring proposals on the council at the last minute but to help make sure the issues were addressed.

The motion to reduce transfers from the wastewater and surface water funds failed 5-2. Bayerkohler and Jennie Hulsizer cast votes in favor of the proposal.

The proposed 2014 budget passed 6-1, with Bayerkohler voting against.