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MINi7TE5 <br />CITY COUNCIL <br />SEPTEMBER 14, 1994 <br />he could not guarantee problems won't some day exist. <br />LaValle stated that given the Administrator's excellent <br />job in handling the budget and the day-to-day operation <br />of the City, he was comfortable with the use of $25,000 <br />in surpluses to buy down the 1995 budget. LaValle <br />supported the reduction of the net levy to 3.3% at this <br />time, and felt that another $38,000 in reductions <br />should be made later so that the City can achieve a 0% <br />levy increase. <br />Pedersen asked if the use of this surplus to buy down <br />the levy would affect the City's bond rating. <br />The City Administrator indicated that the reserves that <br />the City has have a positive affect on its bond rating. <br />The Administrator did not believe that use of $25,000 <br />in surpluses to buy down the 1995 levy would negatively <br />impact that rating. The Administrator pointed out that <br />going into 1995, the City has done greater financial <br />planning than it did in the past. This effort will <br />have a positive impact on its bond rating. <br />Hanson felt that a surplus at the end of a budget year <br />may cause some property owners to believe that the City <br />is over-taxing. Therefore, Hanson supported giving <br />back the surplus to the property owners by buying down <br />the 1995 levy. <br />Scalze stated that she cannot remember a year where the <br />City's budget ran at a deficit with the exception of <br />1978. There has been a surplus every year in the <br />budget since that time. <br />The City Administrator recommended that the Council <br />decide the issue of the use of the $25,000 surplus to <br />buy down the 1995 levy at the front end of the budget <br />process so that the impact can be applied now. The <br />Administrator felt that a 0% levy increase was a <br />commendable goal, and while he was confident that the <br />levy increase can be reduced further, he was not as <br />confident that a 0% levy increase could be achieved. <br />The Administrator also pointed out that with the <br />reductions discussed this evening, parcel-specific <br />Truth In Taxation hearing notices will show a 3.30 levy <br />increase proposed by the City. If property values have <br />been increased, the tax increase will be higher than <br />3.3%. <br />14 <br />