Walaker calls for cuts to budget requests
FARGO -- Mayor Dennis Walaker has called on the city's department and division heads to trim 2011 budget requests 1 percent. "We will also curtail requests for additional full-time staffing," Walaker said in a memo dated June 14. Walaker cited th...
FARGO -- Mayor Dennis Walaker has called on the city's department and division heads to trim 2011 budget requests 1 percent.
"We will also curtail requests for additional full-time staffing," Walaker said in a memo dated June 14.
Walaker cited the need to fund higher health insurance and pension costs as the reason for tightening the purse strings.
"Even though things are good statewide, we have to be very, very cognizant" of other economic pressures, Walaker said.
Finance Director Kent Costin said employee retirement funds were hurt badly when the stock and bond markets were rocked by financial crises and recession. At one point they lost 20 percent to 25 percent of their value.
Last year, commissioners added more than $800,000 to the city's contributions to pension plans for police and firefighters, the North Dakota Public Employees Retirement System and a city plan, Walaker and Costin said.
While the market has improved and investment returns are growing, Costin expects actuaries will urge the city to make big increases in pension contributions -- perhaps even doubling them.
Pension contributions are budgeted at $3 million for 2010, documents show.
Costin said health costs are also continuing to rise, and may go up 8 percent to 10 percent in 2011. About $6.2 million was budgeted for 2010 health plan costs, documents show.
In his memo, Walaker cited the weak economic recovery as another reason for a tight budget.
"We discussed the need to maintain a cautious outlook as we move forward to make sure that we hold the line on spending in light of the delicate national economic recovery which appears to be slowly evolving. While our local and statewide economies have been stronger than national statistics, we see evidence of slowing revenues in the 2010 fiscal year that will likely continue into 2011," Walaker wrote.
"To effectively manage budget growth, I am recommending that all Departments and Divisions approach the 2011 budget with a goal of lowering costs by 1 percent. We will also curtail requests for additional full-time staffing. Funding of health insurance and pension obligations continue to be of concern."
Costin said hiring is not completely ruled out, but significant hires, like the seven police officers and 12 firefighters added in the 2010 budget, are not likely.
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