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Duluth panel recommends tax increase

DULUTH -- The Duluth Citizens Budget Committee recommended the city consider implementing a tax increase of up to 1.5 mills and other measures to offset a $2 million revenue shortfall in the proposed 2011 budget.

The recommendations were presented at Monday's Duluth City Council meeting by Maxine Garner, chairperson of the citizens panel.

Committee members met five times over a two-month period to study Duluth's finances and proposed budget. Most of the committee's recommendations, Garner said, involved generating revenue since the initial citizens panel last year cut out most of the fat. "There wasn't much left to cut," she said.

The budget committee recommended continuing freezes on employee cost-of-living and merit raises and on hiring for fiscal year 2011. It recommended against implementing employee furloughs.

The council agreed to continue paying 95 percent of the cost of employee health insurance and 85 percent for dependents as recommended by the citizens panel. Coverage was renewed with Blue Cross/Blue Shield, but the city raised deductibles and co-pays to offset a potential 49 percent cost increase. The changes reduced the amount of the increase to 22 percent.

A committee recommendation to charge fines for excessive false alarms that unduly burden the Duluth Police Department was implemented by the council. Punishment includes up to 30 days incarceration or fines escalating from $50 for the third false alarm to $1,000 for the seventh or more false alarms per calendar year. Last year Duluth police answered 3,000 false alarm calls.

The citizens panel also advised the city to charge companies that tow away illegal vehicles a franchise fee, reduce the number and expenses of city events, implement a credit card convenience fee for payments and establish a storm water management fee.

"None of us envy you having to make such tough decisions, but we all feel that you will do what is best for the citizens that you so ably represent," Garner told the council.

The fiscal year 2011 budget will run from July 1, 2010, through June 30, 2011. A public hearing on the proposed budget is scheduled for May 24.

Red light cameras approved

The council voted to enter into a five-year contract with American Traffic Solutions to install red light cameras at several intersections in the city to deter accidents. ATS will replace the current provider Laser Craft.

The city has three red light cameras in operation.

ATS will charge more for each camera per month compared to Laser Craft, but ATS will not charge the city more than the amount of revenue the camera produces. ATS cameras also provide videos of vehicles that run red lights instead of just photos.

Red Clay demolition

The council directed Duluth Economic Manager Chris McGahee to proceed with hiring a contractor to demolish the remainder of the old portion of the Red Clay Theatre using funds provided by the Duluth Downtown Development Authority at an estimated cost of $21,000.

The end of the theater had been demolished recently to make way for improvements to Ga. Highway 120.

The city had planned to save and renovate the rest of the old theater portion, which had been damaged by heavy rains and flooding last fall. But after the brick facade was removed due to safety concerns, severe structural damage was discovered.

The new part of the theater containing the stage and seating remains intact and continues to host performances.