The Cloquet 2022 budget could be bad news for taxpayers
Cloquet city councilors are expected to be stingy with their 2022 budget requests due to rising insurance costs that could lead to an increase in levies of up to 8%, city administrator Tim Peterson said in June.
The board approved a total increase in levies of approximately $ 87,800, or about 2.9%, in 2021, with approximately $ 43,000 in operating levies covering expected increases in health insurance costs, as well as expected wage and contractual increases. However, the city’s workers’ compensation insurance premium has doubled in the past year, according to Cloquet’s chief financial officer Nancy Klassen, who said this was the main reason for the budget concerns.
The increase in insurance will likely affect years of budgeting, Klassen said. To offset the cost and avoid a significant increase in levies, the city plans to use a portion of its planned funds of $ 1.27 million in the American Rescue Plan Act to cover any shortfall.
In order to protect the privacy rights of staff, Peterson declined to comment on the reason for the increase in insurance except to say it was not due to an increase in claims. The Pine Journal verified this statement via a data request, which found that the number of complaints rose from 22 in 2019 to 13 in 2020.
However, the city is experiencing an increase in other disability costs of post-employment benefits in 2020 due to an increased number of PTSD-related leaves taken by Cloquet police officers, according to the audit report.
Another increase in insurance in 2020 came when several staff members switched from individual insurance to family insurance, resulting in a street personal services budget overrun of $ 63,400. However, the cost of supplies to the department was under budget by $ 87,200.
Overall, the City’s general fund balance increased in 2020 by $ 881,200 in 2020, with the undesignated portion increasing by $ 954,000. The 2021 budget audit report is not yet available as it will not be completed until summer 2022.
The city’s department heads began planning their 2022 budgets earlier this summer, with council due to review and approve the final budget in August.