County reviews 2013 budget proposal

Increase includes salary, health care costs

BY KATY ZILLMER

Hennepin County, like all of its municipalities and school districts right now, is planning its checks and balances for the coming year.

County Administrator Richard Johnson presented the proposed 2013 budget — at a 1.2 percent increase from 2012 — to the Board of Commissioners last week.

The proposed increase, which equals $20.7 million in the overall budget amount of $1.75 billion, includes a salary adjustment for county employees, the purchase of new voting equipment, uncompensated care costs at Hennepin County Medical Center, and an increase in debt payments, Johnson said.

Employees in the county have not had a salary adjustment since 2009, and the proposal for 2013 is a 2.5 percent general adjustment in wages, Johnson said. Merit increases in wages, held flat since 2010, are not proposed in the 2013 budget.

The county’s preliminary property tax levy, approved at a maximum by the board in September, is about a 1 percent increase from 2012.

Proposed levy dollars in the budget, which based on property values of housing and businesses determine property taxes for those owners, are $674.6 million.

Johnson said the decline in residential property values could cause more of a tax shift to commercial and industrial property owners, Johnson said.

Market values in Hennepin County have declined at different rates for single and multi-family residential properties as well as for commercial and industrial buildings since 2007, according to Johnson.

The county board can only decrease the property tax levy before the final budget approval in December.

It will be reviewing all facets of the budget in hearings during the next few months.

“I think it’s a reasonable budget,” said Sixth District Commissioner Jan Callison. “It’s a challenging budget climate, I think the county administrator has done a good job,” she said.

Callison also spoke to the health care costs in the proposed budget and said they’re, “problematic.”

According to Johnson’s budget speech to the county board, the financial pressure on the county and its costs for services reflect unemployment, home foreclosures and declining property values.

“This has created a paradox of rising needs for county services when resources have been dwindling,” he said.

For example, cash assistance payments have increased by 10 percent; food support cases are up by 69 percent; and calls to Child Protection each month jumped by 28 percent, according to Johnson’s speech.

He said the uncompensated care costs at Hennepin County Medical Center and its clinics that contributed to the proposed budget increase continue to grow. “Uncompensated outpatient cases increase 23,000 over last year, and further cuts are expected to add an additional $4 million to HCMC’s uncompensated care costs in 2013,” Johnson said.

The contingency fund in the county’s proposed budget includes the $4 million for uncompensated care, he said. “But the risk is it could actually be higher.”

 

Capital, department budgets

Hennepin County’s 2013 proposed capital budget is $179.5 million, an 8.4 percent decrease from 2012.

Johnson said the completion of projects — such as the new Lowry Avenue bridge in Minneapolis — funded through the capital budget contributes to the decrease.

Spending in the capital budget is tied to the county’s debt, which will be discussed during the budget hearings.

The proposal is to include $52.7 million for projects at HCMC for inpatient care improvements and construction of a suburban primary care facility in the western suburbs, according to Johnson’s speech. Funding of those projects should be supported by revenue from HCMC, he said.

Budgets for departments in the county, such as the library, human services and public health, are proposed to stay the same as 2012.

The purchase of new voting equipment reflects an increase in the taxpayer services budget, according to Johnson.

The voting equipment is at least 13 years old and does not meet current requirements, he said. It could cost about $4.1 million and the county has a grant of $917,000 to fund the project as well.

 

Budget hearings

Scheduled budget hearings will provide the board the opportunity to review specific department costs and for the public to provide their input as well.

The first hearing is from 9-11:30 a.m., Wednesday, Oct. 10, in the county boardroom at the Hennepin County Government Center, 300 S. 6th St. in Minneapolis. The hearing will focus on the general government and library budget costs.

“We’ll be looking at all parts of the budget,” Callison said. “There are areas the county administrator has flagged as problematic, such as health care costs, court security and the capital budget,” she said.

While the capital budget is proposed at a decrease for next year, projects funded with those dollars reflect borrowing in the county, she said.

“We don’t want to be in a position where the debt service is excessive,” she said.

The circulation policy of Hennepin County libraries and how much is budgeted to spend on books may come up at the Oct. 10 budget hearing, Callison said.

“We’ve been trying to economize throughout the county,” she said.

Topics for future budget hearings include the capital budget, public safety, human services and public health.

The county is currently studying its court security at suburban courthouses in Brooklyn Center, Edina and Minnetonka after implementing temporary weapons screening at those locations earlier this year.

Overall, Johnson said the county is trying to maintain the current service level for its residents.

“The county continues to fund what is essential, but there is less flexibility,” he said. “We can cut back only so far before services have come to expect can no longer be provided at the same level year after year.”

A public meeting on the budget and property tax levy will be at 6 p.m. Tuesday, Nov. 27, in the county boardroom. The board will approve the final budget and levy on Tuesday, Dec. 11.

The schedule of budget meetings is available at hennepin.us/hcbudget.

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