11-22-10 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL NOVEMBER 22, 2010 that the City of Arden Hills is providing no increase, however, the cost of health insurance for this city actually went down. The Administrator reported that the proposed 5% increase appears to be about average. He also noted that City employees have agreed to modifications in the coverage, which reduced the amount of the initial cost increase proposed, but results in additional employee out -of- pocket expenses for co -pays, prescription costs, etc. Blesener noted that the result is that both the City and employees are absorbing increased health insurance costs. The Director reported that while the Water and Sewer Funds are part of the 2011 Budget, actual rates would be presented to the Council for action early in 2011 after fourth quarter results. The Director indicated that, at this time, she is anticipating the need for a 5% increase in rates. The Director noted that 2010 was a rainy year, which results in less water revenues, but increased storm water treatment costs to the City. The Director reported that at this time, City staff is recommending a 3.94% gross levy increase given the adjustments to 2010 and 2011 revenues and expenses. Again, the preliminary 2011 gross levy increase was certified at 5.98% in September. The City Administrator pointed out that the actual 2010 surplus coupled with the projected 2011 surplus will provide the City with an almost 75% cushion for anticipated State Aid reductions. The Director indicated that if the Council wants to reduce the levy increase further, $26,252 is equivalent to a I% decrease. The City Administrator noted that while the final adoption of the Budget will not occur until December 15 City staff would like an indication of the Council's position at this time so that it can prepare the Truth In Taxation presentation which will be made on December 15 Montour indicated that he was comfortable with a 3.94% increase which is essentially a 0% increase plus the additional funding needed for the fire equipment replacement plan. Ide noted that this increase will still provide a cushion for an impending State Aid reduction. The Administrator was asked how certain the 2010 actual estimates are. The Administrator indicated that those numbers are very certain. The Administrator also discussed the certainty of a State Aid reduction for Little Canada. He pointed out that work had begun at the State level to revamp the State Aid system; however, no work has moved forward on this for the past year. Blesener noted that an additional $27,287 would buy down the levy increase to 2.9 The City Administrator noted, as he has in the past, that the use of reserve funds to buy down the levy is one -time money which would have to be sustained in future years. Otherwise, the result is spikes in levy increase amounts and property taxes. The Administrator noted that 4