06-26-2013 Council Workshop Minutes

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MINUTES CITY COUNCIL JUNE 26, 2013 Keis asked if consideration has been given to combining the Parks and Public Works operations. The Public Works Superintendent indicated this will be a discussion point especially now that the new Public Works garage will be located on the east side of the City. VETERAN'S The City Administrator reported that Slumberland has made a $5,000 MEMORIAL donation for the Veteran's Memorial project. FINANCIAL The City Administrator reported that the City has been informed that PLANNING Local Government Aid (LGA) for 2014 will be $344,818, an increase "WHAT IF'S" of $148,975 over 2013. The City has also been informed that levy limits have been put in place for 2014. Based on this information, the Finance Director has put together some budget scenarios for the Council's consideration. In those scenarios, expenses have been projected to increase by 3% except police and fire are projected at 4 %. Revenues were held constant except for LGA and property taxes. The Finance Director noted that the scenarios provided cover a range of options from no levy increase in 2014 or 2015 removing LGA from the General Fund to levy limits in 2014 with no debt levy and eliminating LGA in 2015 with an 11.2% levy increase. These options are outlined in the June 21, 2013 report from the City Administrator. The Council discussed the fact that in increasing LGA and imposing levy limits the Legislature is forcing cities to utilize LGA dollars for General Fund expenses, while the City's policy has been to work toward eliminating LGA dependency in the General Fund. The Administrator and Finance Director pointed out that bonding for debt for the Public Works garage may allow the City, if it chose to do so, to increase its levy by the amount of debt. The Administrator also pointed out that if the City follows its Reserve Policy goal to maintain reserves at 48% to 65% of the General Fund Budget, based on 2012 Audit results, there appears to be a substantial amount that can be transferred to the Capital Improvement Fund. The Administrator noted, however, that these are one -time dollars. Blesener indicated that his opinion was that the City should bond for the Public Works garage to ensure flexibility with levy limits. He suggested a 2% to 3% increase in the levy for 2014 and 3% to 4% in 2015. Blesener felt that after 2015, the City will have a better idea on the future of LGA, and hopefully can eliminate LGA dependence in the General Fund. Montour agreed that the uncertainty related to LGA has proven to be a struggle for the City. 5