09-10-08 Council Workshop Minutes

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MINUTES CITY COUNCIL SEPTEMBER 10, 2008 study is completed and the formula modified, it is hoped that these concerns will lessen and LGA will be more equitable and stable. The Administrator noted that the second factor is Levy Limits imposed by the Legislature, with Little Canada's being limited to a 3.9% increase, or $2,195,962. The 2008 Levy was $2,387,488. The Administrator noted that the Legislature is mandating that LGA be used to buy down the levy. He felt that there was little risk of doing so for a City that has been a long- term recipient of LGA, but noted that Little Canada was receiving no LGA for a few years and it was just reinstated in 2008. The Administrator noted that Levy Limits can be exceeded for increased police costs, namely salary and benefit costs. He updated the Council on the two-year delay of the Sheriffls Department formula change which would increase Little Canada's share of the Sheriffls Contract by $18,000 in 2009 and $50,000 in 2010. In lieu of this increase an additional full- time officer is being added to cover Little Canada. It is hoped that the outcome of the additional coverage will ultimately result in fewer calls in Little Canada, thus impacting the formula favorably. There is the possibility that the City will want to continue with the additional officer after the two-year period, but that is a consideration that will be made at a later date. The City Administrator reviewed several possible levy scenarios for the Council discussing the resulting Gross Levy and Net Levy increases. The Council discussed each of these scenarios, the uncertainty of LGA, and the revenue gained from the City's Franchise Fee. In discussing LGA, the Administrator pointed out that historically when the State has had a budget deficit, LGA is one of the first cuts that the State has made. It was noted that last year Little Canada used $75,000 in LGA dollars toward the General Fund to the benefit of taxpayers. This year's LGA allocation for Little Canada has increased, but the Administrator noted that Little Canada has not been along-term recipient of these dollars. The Adminishator felt the most prudent plan would be to use the majority of LGA dollars toward capital/one-time expenditures, rather than on-going budget expenses. The City Administrator noted that the task for the Council this evening is to set the Preliminary 2009 Levy for certification to Ramsey County. Once the preliminary levy is set, the Council can only stay at that level or go down in determining the final levy. The Administrator again cautioned the Council on the utilization of LGA for on-going budget expenses, noting that should LGA be reduced or be eliminated, it would be necessary to increase the tax levy to make up the lost LGA dollars. The Administrator noted that the City has been prudent in trying to maintain a stable tax levy so that taxpayers are not being faced with spiking tax bills