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MINUTES <br />CITY COUNCIL <br />SEPTII~SBER 7, 1995 <br />Pedersen pointed out that a decrease in reserves could <br />affect the City's bond rating. <br />Fahey pointed out that reserves are increased with <br />budget surpluses, therefore, the money would not be <br />lost to the City. The projected surplus in the 1995 <br />Budget is $15,000. <br />Morelan pointed out that the reserve requirement goes <br />up each year, and the City has been funding reserves <br />from surpluses. <br />Fahey asked what the consensus was on the net levy <br />increase. Fahey, Scalze, LaValle supported the 3% <br />increase, while Morelan and Pedersen supported 3.5%. <br />Fahey pointed out that the Council has not reviewed the <br />various department budgets. Staff can be asked to go <br />back and cut their budgets. <br />Morelan stated that he would rather make the additional <br />cuts or increases in revenue tonight, than to certify <br />the levy at a 3.0% increase and then identify find the <br />dollars later. <br />Fahey asked if this budget takes into account 10~ <br />funds. <br />The Administrator replied that it did not. It was also <br />pointed out that there is no limitation on the use of <br />those dollars, provided they are used to decrease <br />taxation. <br />Morelan pointed out that if l0o funds are used for the <br />1996 Budget, they will have to be used each year. <br />Fahey replied that that was not true. If the City's <br />tax capacity grows, there will be more tax base over <br />which to spread the levy. <br />Morelan stated that the 3.5% would leave the City the <br />option to levy that amount if it were necessary to <br />maintain current services. <br />The Administrator reported that if he can identify any <br />additional areas of increased revenue or decreased <br />expenses prior to the September 13th meeting, he will <br />do so. <br />Morelan pointed out that nothinq has been budgeted for <br />economic development. <br />12 <br />