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HomeMy WebLinkAbout06.09.08 Work Session Minutes City Council Workshop Minutes June 9, 2008 Acting Mayor Pritzlaff called the workshop to order at 6:53 p.m. Present: Absent: Pritzlaff, Fogarty, McKnight, Wilson Soderberg MOTION by Fogarty, second by Wilson to approve the agenda. APIF, MOTION CARRIED. The purpose of this workshop was to discuss the 2009 budget. Council gave the direction that they wanted to see scenarios of 0-5% of the levy increase. The 2009 levy limit for the City is $7,469,046 exclusive of other special levies. Council was presented with two scenarios. If the City levied to the limit, we would levy $10,032,000, this would be an increase to the levy of 13%. This would increase general fund revenues by 8.8% or $528,000. The second scenario is under the levy limit. The requested levy amount is $9,389,000 which amounts to a total increase with debt service of 5.85%. This increases the general fund revenue by 3.4% and amounts to a tax capacity rate of 45.89%. Ifwe kept the levy increase equal to the growth in the tax base, we would have less than 2% levy increase and between $300,000 - $600,000 that would be eaten into that because of debt service. The cost of fuel was discussed. At one point officers responded to calls only. Councilmember Fogarty suggested considering bicycles and motorcycles. Councilmember McKnight suggested walking the downtown area. City Administrator Herlofsky had hoped to work in a Fire Chief. Another department that has not been touched is Parks when looking at programming. There are discussions between Community Ed, the Parks Department, and he is trying to encourage the YMCA to become a participant in the community. The parks belong to the City, but as far as the recreational programs, it does not matter who provides them, as long as they are in the community. Council was also given a scenario showing a 3% increase. That does not consider anything other than the full amount of the debt levy and the general fund would be down $369,000. A 3% increase for the general levy would result in negative money to the general fund and more money to debt service. We could adjust the debt service numbers which would equate to a flat dollar amount in the general fund for revenues. Councilmember Fogarty asked about the 5.85% increase and that it would add $200,000. She asked what percentage that would be for the fund balance. Finance Director Roland stated we would do a balanced budget and it would be a little less if we under spend on expenditures. Council Workshop Minutes June 9, 2008 Page 2 City Administrator Herlofsky noted we do not have a lot of people and not a lot of turnover. Three positions have been cut out this year. We do not have a lot of extra people. Building Inspections is down to two from four. Community Development is down one, Engineering is down three. We would be very nervous with any further reductions. Finance Director Roland noted salaries and benefits are between 67% and 72% of our total City budget. This is the biggest place to make an adjustment of any kind. The other line items are not as substantial as salaries and benefits. Building permits have been kept down to $172,900. The assumption in expenditures is 3% across the board for salaries. The Clerical, Technical and Public Works have been settled at that level. Law Enforcement does not have a contract for 2009. If the settlement were higher than 3%, then that is not reflected in expenditures. Departments have been encouraged to request what they need to enable seeing what the issues are and helping to plan for future things. This also helps departments to combine resources and people. Councilmember Fogarty asked for the requirements for certain employees as far as training to maintain certifications. She felt Council needed to be reminded of that when training is requested. Councilmember Pritzlaff asked that the required training not be out of state if possible. City Administrator Herlofsky asked Council for some feedback on whether they should levy the maximum or a range. Councilmember McKnight stated his range was 0-5% so the proposals are almost there. There will be more work to do once the departments submit their requests. He is comfortable with starting at 5.89%, but would like to get it to at least 5%. Councilmember Pritzlaff stated the proposals were way higher than what he expected. Finance Director Roland stated her concern is if we go with a 0% levy, then we have to reduce the general fund between $300,000 - $600,000 from 2008. There is no way to do that without reducing staff. It's great to say we did not raise the levy, but then there is a trade-off in the level of service provided to the community. Police and professional staff cost a lot of money - $100,000 - $125,000 with salaries and benefits. Not raising the levy means a cut to vital things in the general fund. Councilmember Pritzlaff stated if we do not have a bad winter, we do not save that much with plowing. Finance Director Roland stated if staff is not plowing snow, they are full time employees and doing other work. What you save in snow plowing is overtime. City Administrator Herlofsky noted if fuel costs continue to rise, we will have to look at options. Councilmember Wilson asked about the capital outlay items. Finance Director Roland noted the vehicles are from 2008 and 2009 requests have not been received. Councilmember Wilson stated he would rather retain staff than look at other options. He suggested 1.5% - 2% increase rather than 3%. Finance Director Roland noted they cannot change approved contracts. Councilmember Wilson suggested only spending 2/3 of the capital outlay budget, such as $100,000. Limit out state travel to only necessary trips. He would like to see the levy in the 3%-4% range. Council Workshop Minutes June 9, 2008 Page 3 Councilmember Fogarty stated she does not want to lay anyone off, but a 6% levy increase is tough. She noted the survey asked people if they would rather see their taxes go up or services cut, and they wanted services cut. Cutting public safety is not an option, but it is the biggest part of the budget. We could have a policy for 2009 where we retain staff, but it is response calls only. Finance Director Roland noted if we only increased the levy by the amount of growth in the tax base, we would take a $300,000 hit to the general fund budget. Councilmember Pritzlaff noted at the last workshop he was looking at 0% - 2%, now he might go to 3%-4%. MOTION by Fogarty, second by McKnight to adjourn at 7:47 p.m. APIF, MOTION CARRIED. Respectfully submitted, ~ /Y)~ ynthia Muller Executive Assistant