08-22-07 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL AUGUST 22, 2007 2008 BUDGET The City Administrator pointed out that Little Canada had been the & LGA IMPACT recipient of Local Government Aid (LGA) for many years, until the City's allocation was eliminated in 2003. He noted that the Mayor has been a member of the Metro Mayor's Association's LGA Task Force. Task Force studies have indicated that without a major infusion of dollars into the LGA program from the State, Little Canada will continue to receive no LGA dollars. The Administrator reported that the City has now been informed that it will receive $225,000 in LGA for 2008. While this is a welcomed surprise, the Administrator recommended extreme caution in a dependence on these dollars. He noted the total lack of stability in the LGA program over the years, and cautioned the use of these dollars to offset General Fund expenses. The Administrator reported that the Finance Director contacted the State and asked why Little Canada is being allocated LGA dollars at this time. He pointed out that the City of St. Paul will be losing dollars and many other cities are not getting any funding. The Finance Director reported that based on the formula used to determine LGA funding, Little Canada will receive $225,000 for 2008, and possibly $400,000 if formula changes considered during the past legislative session were enacted in a special session. The Administrator indicated that it is well known that the LGA formula does not work equitably, and indicated that there are ongoing discussions about revamping this formula. Blesener indicated that there is a push to look at restructuring the formula and bring it up to date. He agreed that it is well known the formula does not work. The Administrator noted that in times of a State budget crunch, LGA is one of the first things the State looks at reducing. Secondly, he noted that if it is this easy to obtain LGA funding, it is just as easy to lose it. The Administrator again recommended extreme caution in the use of these LGA dollars. He reviewed tlu-ee potential options for handling these funds as outlined in his August 17, 2007 report. He noted that these options can be reviewed in greater detail at the September 12°i Budget Workshop Meeting. The Administrator reported that preliminary budget runs ai-e showing a 4.71% increase. These preliminary budget projects include additional staffing expenses. The Administrator also noted that there is a push by the City of North Oaks to revamp the Sheriffls Department expense allocations which would result in Little Canada picking up a greater share of this expense. The Administrator noted that Little Canada will have more budget pressures moving forward. 6