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<br /> MINUTT;S <br /> CITY COUNCIL <br /> Srl'TI;MBER 8, 2010 <br /> indicated that while 2011 will be a difficult year, unless the economy <br /> rebounds, 2012 could be worse. He noted that the League is doing a study <br /> and is projecting that there will be some cities of various sizes and <br /> locations that could be facing bankruptcy. The Administrator indicated <br /> that Little Canada is in good financial shape, and will not be in that <br /> position. He noted, however, that the use of reserves and/or surpluses to <br /> balance the budget without making cuts is problematic since those dollars <br /> are one-time dollars. He also pointed out that the projected General rund <br /> expenditure increase is at .O1$ or $333 from last year. <br /> Blesener noted that those expenses include a 2% increase for employees in <br /> 2011, again noting that there was no increase in 2010. He further pointed <br /> out that employees will be expected to absorb approximately 6% increase <br /> in health insurance costs. There was some discussion related the level of <br /> wage increases being proposed in other cities, with the City Adminisri•ator <br /> indicating that at this point there appears to be a range from 0% to 3%. <br /> The Council then discussed the range of levy increase being proposed in <br /> other cities. The City Administrator indicated while cities are trying to <br /> maintain as low an increase as possible, each city is facing issues related <br /> to previous unallotments as well as what might happen in the future. He <br /> noted that in 2010 the City of North St. Paul levied a double digit levy <br /> increase as the result of unallotments. The Administrator indicated that <br /> the County is proposing a 2.7% levy increase. Blesener noted that the <br /> Governor has indicated that the State may have to borrow money to meet <br /> its 2010 obligations. <br /> McGraw asked if the State would go after the reserve funds held by cities <br /> similar to what they did with school districts. 1'he City Administrator <br /> indicated that a number of years ago the State restricted school district <br /> fund balances. He indicated that cities are political subdivisions of the <br /> State; and, in theory, they could go after city reserves. The Administrator <br /> reported that Little Canada has designated its fund balances. He noted, <br /> however, that during the audit presentation this year, the City's auditor <br /> pointed out that there will be more scrutiny of these fund balances as well <br /> as changes in how they are to be reported. "I'he Administrator pointed out <br /> that Little Canada has used surpluses to pay for infrastructure <br /> improvements, thus avoiding debt. He indicated that the State could say <br /> that cities have too much money in reserves. He did not feel that Little <br /> Canada's reserves would be an early target noting that it has conservative <br /> reserve levels. <br /> McGraw asked about Little Canada's debt load compared to other cities. <br /> The Administrator indicated that Little Canada has no general obligation <br /> (taxpayer supported) debt. The debt that the City does have is supported <br /> by Housing Improvement Area fee payments as well as assessment <br /> 4 <br /> <br />