04-14-10 Council Workshop Minutes

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MINUTES CITY COUNCIL APRIL 14, 2010 Discussion was had on a possible reduction in the Fire Department budget. The City Adminisriator reported that he discussed the budget adjustments with the Fire Chiei; but has not heard back as of tonight's meeting. The Council discussed the reduction in Par]< Consultant Fees of $15,000, and it was the consensus of the Council to retain that reduction. The reduction for Fire Relief Contribution of $21,924 was also retained as it is assumed the required contribution will fall to below our $15,000 commitment. The Council discussed the proposed increase in electric franchise fee that would raise an additional $55,900 in revenue. The Administrator reported that he had one comment fiom a resident indicating his preference for an increase in property taxes rather than the franchise fee, as property taxes are a deductible expense. The Administrator reported that in his discussions with Xcel Energy, a June 1s` implementation date for this increase appeared feasible. The Administrator pointed out that a public hearing and ordinance amendment will be necessary to implement the increase. Blesener felt that an increase in the franchise fee may be more palatable than a 2% to 3% increase in property taxes. The Finance Director noted that the franchise fee increase is more of a burden on commercial properties in the City than on residential. Montour noted that the total franchise fee on a residential property, including the increase being considered, is less than $50, which would not result in much of a deduction on income taxes. Blesener noted that those property owners taking the standard deduction would see no benefit. The City Administrator also pointed out that revenue generated from the franchise fee goes into the City's Infrastructure Fund. IIe further noted the costs associated with burying power lines come from that account, which is a direct correlation to the franchise fee on electrical. 'fhe Adminish~ator reported that there are two sn•etches of power lines that will need to be buried, and the associated costs a~~e estimated at $600,000 to $700,000. Blesener stated that he would prefer to work toward a 0% levy increase and retain the increase in the franchise fee. Montour indicated that it may be difficult do achieve a 0% levy increase. The City Administrator agreed noting the uncertainty with local government aids, and the need to restore City fund balances. The Council discussed the City's Infrastructure Fund and the level of street reconstruction/replacement that will be necessary in the next few 3