09-24-2014 Council Workshop Minutes

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MINUTES CITY COUNCIL SEPTEMBER 24, 2014 The budget maintains usage of Local Government Aid (LGA) in the General Fund at $146,901 even though the City's LGA is increasing by $33,704 for 2015. By maintaining the 2014 level of LGA in the General Fund, the City is not attaining its previous goal of reducing General Fund reliance on LGA. The City is certified to receive $378,529 of LGA in 2015, and the balance of $231,628 would be allocated to the General Capital Improvement Fund. The Administrator reported that based on information he has obtained from other cities, it appears the norm will be a 2.5% to 3.5% gross levy increase. The Administrator indicated that if the Council wants to reduce the levy to attain a percentage lower than the 4.16% in the preliminary 2015 Budget, the following amounts would have to be attained either through expense reductions and/or revenue increases: 4.0% - $5,095 3.5%- $18,720 3.0% - $32,350 2.5% - $45,940 The City Administrator indicated that if the Council chooses to set a lower preliminary levy amount for 2015, there some options that can be considered as the City moved through the budget process. The Administrator noted that one area of consideration might be staff's projected utility costs for 2015. Others might be to utilization of about $5,000 in Cable TV franchise fees and a reduction of $2,000 in projected Planner costs for special projects. The Administrator indicated that additional options may come along as the numbers are refined throughout the process. Blesener suggested use of the dollars that had been allocated for 2014 sealcoating to buy down the levy. The Administrator noted that these would be one-time dollars. Keis asked about the surplus and pointed out that the City generally has a surplus each year due to conservative budgeting. The Administrator again estimated the surplus at $103,629, again pointing out that this amount will be refined as the year progresses. The Administrator pointed out the City's use of reserves in the past to buy down the levy, noting that these are one-time dollars. The Administrator then reviewed General Fund expense increase drivers as were outlined in the September 18, 2014 budget memo. These included the following: • Mayor & Council Salaries up pending final decision on increase (+5,080). • Attorney Prosecution Costs increasing per approval earlier this year (+$13,096 from 2014 Budget and +7,346 from 2014 Actual). 2