09-08-10 Council Workshop Minutes

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MINUTES CITY COUNCIL SEPTEMBER 8, 2010 payments. There is also "I'ax Increment Financing (TIF) debt suppor-red by TIF proceeds. The City Administrator stated that in the 1990's debt comprised one-third of our levy. That debt was leveled out and then retired. The Administrator then reviewed the recommendations of the City's Debt Levy Reduction Committee relative to the reallocation of debt levy dollars to reduce the levy as well as support the Infrastructure Fund. The Administrator also commented on the fact that the City has used its cash balances as an investment vehicle by avoiding debt and financing special assessments internally. The Council again discussed the level of levy increase for the preliminary 201 I Budget levy, noting that in setting the final levy, the City cannot exceed the preliminary levy amount. The Finance Director pointed out that 3.94% Gross Levy increase includes an annual funding requirement for fire truck replacement as well as a $179,778 sw•plus that would provide a cushion equal to a 42% reduction in State Aids. The City Adminisri•ator pointed out that based on the State's miallohnent that occurred earlier this year, the City made adjustments to its 2010 Budget. These have been carried forward in the 2011 Preliminary Budget document. The City's State aid exposure for 2011 is $428,000, and the Adminisri•ator indicated that he would not be surprised if the State unallotted 50% of that amount. He pointed out that the $179,778 surplus would provide a cushion, but noted that the proposed 2011 Budget is depending on the State aids over that amount. The Finance Director indicated that a 0% Gross Levy would eliminate the $109,000 in fire truck replacement funding. "the Administrator noted that the $109,000 would be needed annually to support the fire truck replacement plan. He acknowledged the efforts made by the Fire Depar•Crnent to retain equipment for as long as possible as well as the Fire Department's willingness to participate financially in the cost of truck replacement. It was noted that the first truck that will need to be replaced is the ladder truck at an estimated cost of $1.2 million, and Blesener pointed out that approximately two years later a pumper truck will need to be replaced at a cost of $500,000 or $600,000. The Administrator reported that City staff will likely be proposing some changes to the City's General Fund Surplus Transfer Policy. He also stated the Infrastructure Fund appears strong enough to support the City's efforts in street reconstruction and mill and overlay projects without substantial increases in levy support. 7"he Administrator indicated that most of the reconstruction work has been completed, and the majority of future projects will likely be mill and overlays. fart of the reason the City has been able to hold the line on levy increases over the last several years is that City surpluses were directed toward the General Capital Improvement Fund thus allowing the City to purchase Public Works and 5