09-12-07 Council Workshop Minutes

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MINUTES CITY COUNCIL SEPTEMBER 12, 2007 The Finance Director noted that the preliminary 2008 Budget document presented to the Council this evening reflects a 0% net levy increase as she has included the use of a large share of the $225,168 in LGA dollars that the City is projected to receive. This would leave a $74,078 surplus. The Director pointed out, however, that LGA allocations are extremely volatile and noted that there is discussion about a revamping of the LGA formula. Therefore, the Director submitted to the Council a list of possible levy scenarios for their consideration in adopting the 2008 Preliminary Budget. Blesener stated that he was worried that the LGA formula would be changed for next year, and the City has no idea at this time what the impact of a changed formula would be. Blesener stated that he was more comfortable with using a small portion of 2008 LGA dollars for tax relief this year. Once the formula change impact is known, the City could take additional action toward tax relief if the City were to remain on the receiving end of LGA. Blesener noted that Little Canada has received no LGA dollars for the past several years. McGraw pointed out that the largest portion of the City's Budget is comprised of public safety. As a result, there are few places within the Budget that significant cuts could be made. McGraw stated that he agrees with the Mayor's comments about using a portion of LGA dollars for tax relief in 2008, with additional evaluation to be made as part of the 2009 Budget. The Council discussed the level of net levy increase that it was comfortable with for the Preliminary 2008 Budget. There was also discussion on the need for caution given that in the past when the State has had budget difficulties, one of the first places it took dollars to balance the State budget was from LGA. Montour suggested that the State may look at the reserve funds of cities and tap those dollars if reserves are too high. Blesener suggested that any LGA dollars not utilized for tax relief in 2008 should be allocated to the General Capital Improvement Fund. The Council discussed in detail whether the preliminary net levy increase for the 2008 Budget should be set at 2% up to 4%. Council acknowledged that between adoption of the Preliminary 2008 Budget and the Final 2008 Budget there would be efforts made to make cuts and reduce the net levy increase. It was noted that once the Preliminary Levy amount is set, the City cannot go over that amount in finalizing the 2008 Budget. McGraw again pointed out the substantial portion of the City's budget dedicated to public safety which limits opportunities for cuts. McGraw stated that given the unpredictability of the State with regard to LGA, he