09-12-07 Council Workshop Minutes

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MINUTES CITY COUNCIL SEPTEMBER 12, 2007 supported reserving a portion of the City's 2008 LGA allotment until the future of LGA is more certain. He noted that changes the State will make could end up with Little Canada again receiving no LGA. The City Administrator reported that he recently met with a representative of the Association of Metropolitan Municipalities as well as other entities and discussed LGA. The Administrator expressed strong concern that Little Canada's 2008 LGA allotment could be one-time dollars, and noted the volatility of LGA and discussion that a formula change is needed. The Administrator pointed out that the City will be dependent on any LGA dollars used to reduce the levy. The Administrator noted the significant LGA cut that the City of St. Paul will receive in 2008 and the fact that Little Canada has received no LGA for several years and is now slated to received over $225,000 in 2008. The Administrator indicated that there is discussion that the Legislature will change the formula. He suggested that until the formula is changed and LGA is a more stable source of revenue, these dollars should be handled very cautiously. The Administrator stated that while his preference would be fora 0% net levy increase for 2008, he is recommending for the preliminary 2008 Budget a 4% net levy increase. He noted that even at this level, $73,000 in LGA will have to be utilized for tax relief which will be dollars that the City will have to make up in the future if LGA goes away again for Little Canada. The Adminisri•ator noted that City staff will continue to fine-tune the 2008 Budget prior to adoption. He also noted that the City may have a better feel for the status of LGA by December when the final budget would be acted upon. Keis noted that the 2007 net levy increase was 2.86% and the City received no LGA assistance. It is difficult to set a preliminary 2008 Budget at a 4% increase when the City is slated Yo received $225,000 in LGA funds for 2008. Keis acknowledged, however, the volatility of LGA and the need to utilize these dollars cautiously at this time. The City Adminisri•ator pointed out that last year the City bought down the 2007 net levy increase by utilizing $30,000 in reserves. The result is that the $30,000 has to be made up again in 2008. The Administrator reported that there are some areas of the proposed budget that City staff will evaluate to reduce expenditures further. McGraw stated that the City has used tax dollars very prudently and noted increasing costs related to oil prices, maintenance of City streets, an additional Sheriffls Department Deputy, increasing public safety costs, etc. McGraw stated that the Council has to be prudent in considering the