07-09-2003 Council Agenda - Laserfiche WebLink

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The subsequent changes included on Attachment E are as follows: ➢ Final legislation allowed for the City to recover 60% of the aids to be cut in 2004 in its 2004 levy. The cumulative aid cut for 2004 was $196,705, therefore, $118,023 will be allowed to be levied back ($196,705 x .60 = $118,023). In addition to this recovery, the City levy limit equation for 2004 (as we interpreted the formula) allows for an additional $13,917 to be levied which is representative of the low income housing credit. Therefore, the City will be allowed to raise its levy by $131,940 in 2004. ➢ There will be no additional cuts in LGA and MVHC for 2004 as originally anticipated. This positively impacts the General Fund by $33,468 in 2004. ➢ The current legislation anticipates that LGA and MVFIC will be restored for 2005. Additionally, a new LGA formula will be implemented increasing the City aid payment by $24,018 based on 2003 figures. We have excluded the restoration of these funds from the shortfall calculations on Attachment E due to economic uncertainty. ➢ The transfer of the water utility system has been included at a loss of funds of $15,000. However, this is a conservative figure for budget purposes. It is anticipated that with a 30% surcharge on billing plus negotiating more favorable sharing ratios on water tower rentals and other items, we may be able to achieve no net cost associated with the transfer. Additionally, the transfer could result in labor savings or shifts. ➢ Restoration Sister City travel expenses as directed earlier. ➢ Possible restoration of certain cuts made in 2003 for 2004 and beyond. Staff has reviewed the detailed listing of cuts made earlier in 2003. (See attachment F.) Upon this review, it was determined that the majority of these cuts should remain in effect for 2004. The following cuts are the items the Council may want to consider restoring in 2004: City Administrator Conference Expense $1,000 Fall Street Sweeping $3,000 Public Works Travel /Conferences $1,000 Newsletter (increase from 4 to 6 issues) $3,800 MRPA Conference $1,000 Skating Facilities $7,700 $17,500 While the ultimate restoration of these items may be evaluated at a later date, the restoration would impact the possible amount of franchise fee adopted. Therefore, the above total is included on Attachment E. These changes result in deficits of $20,804 for 2003, $83,082 for 2004, and $116,596 for 2005. It would be staff's recommendation to use the LGA contingency reserve to deal with the 2003 shortfall. Since this is a one -time use reserve and the deficit will be recurring, we are only suggesting its use for 2003. Furthermore, any franchise fee collected during 2003 would further mitigate this deficit. 3-