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MINUTES <br />CITY COUNCIL <br />SEPTEAiBER 14 , 1994 <br />it is dangerous to dip into reserves to buy down a <br />levy, the City has budgeted conservatively. Use of <br />these surplus funds to buy down the levy is a way to <br />make sure the City is not overtaxing and is turning the <br />surplus back to the property owner. <br />The Administrator recommended the use of $25,000 in <br />surpluses to buy down the 1995 levy. He did not <br />believe that the use of that amount of surplus will <br />cause the City any problems. This, coupled with the <br />$5,900 decrease outlined above, would result in a net <br />levy increase of 3.3%. An additional $38,000 in <br />reductions would be needed to reach a 0% levy increase. <br />The Administrator noted that if fiscal disparities had <br />remained at the 1994 levels rather than decreased by <br />$30,000, that 0% net levy increase would have been <br />easily attainable. <br />Morelan pointed out the City's use of surpluses to buy <br />down the 1994 levy, and indicated that he had concerns <br />with that action at the time. Morelan stated that he <br />still has not changed his mind. Morelan did not <br />believe it was good policy to use surpluses as a <br />revenue source, noting that this option may not be <br />available to the City on a year-to-year basis. <br />The City Administrator pointed out the City's <br />conservative budget practices and the fact that the <br />City has had surpluses in the last several years. <br />However, the Administrator felt the day could arise <br />when the City would have deficit spending. Unexpected <br />things do come up over the course of a year, and that <br />is the reason that the City has surpluses. <br />Hanson stated that with the good fiscal management the <br />City has shown, he is not opposed to the use of the <br />$25,000 in surpluses to buy down the 1995 levy. <br />Scalze agreed, and pointed out that had fiscal <br />disparities not decreased, using the $25,000 to buy <br />down the levy and the additional $5,900 in reductions <br />outlined by the Administrator, the City could have had <br />a 0% levy increase easily. <br />Morelan felt that the use of surpluses to buy down the <br />levy was not good planning. Morelan stated that he had <br />a problem with using surpluses as a revenue source, and <br />felt it more acceptable to taxpayers to spread out tax <br />12 <br />