09-12-07 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL SEPTEMBER 12, 2007 Therefore, discussion at the workshop focused on what is the appropriate amount of LGA dollars to allocate to the General Fund, which would then impact the City's net levy. The Administrator reported that he has urged the Council to be very cautious in its use of LGA dollars as from the discussions that he has heard it is very likely that the LGA formula will be changed. The impact of a formula change to Little Canada is unknown. The Administrator reported that the City can always use LGA dollars to provide tax relief if LGA becomes a stable revenue source for the City. The Administrator recommended that at this time a significant portion of the City's LGA allocation be put in the General Capital Improvement Fund for one-time expenditures versus into the General Fund and becoming dependent on LGA for on-going expenditures. The Administrator noted that without any LGA dollars, the City's levy increase would be 7.65%. With no LGA and a prior year surplus buy down, the levy increase would be 6.13%. The City could achieve a 0% net levy increase utilizing about 2/3rds of the LGA allocation. Full use of LGA would result in a 3.75% net levy decrease. The Administrator noted, however, that if LGA is eliminated again, the City would have to make up for a large revenue source significantly impacting future levy amounts. The Administrator recommended that for the Preliminary 2008 Budget, the City utilize a 4% net levy increase (6% gross), which utilizes 32.02% of the 2008 LGA allocation in the General Fund. The Administrator noted that the Council and City staff would continue to work on cutting the 2008 Budget with final adoption to occur in December. Blesener agreed that from a preliminary Budget standpoint the starting point should be a 4% increase. Once the preliminary amount is certified, the City can always decrease the levy amount for 2008, but cannot increase it. Allan agreed with a 4% increase for the preliminary levy, and indicated that the goal should be a 3% increase or less. Keis stated that while he was not comfortable ending up at 4%, this is the preliminary levy with the final levy to be adopted in December. Blesener also pointed out that the City may have more information on the status of LGA by December. McGraw felt it prudent to certify the preliminary levy at 4% and work to decrease that amount. He noted that once the preliminary levy is certified, the City cannot increase the amount. McGraw acknowledged that the final levy will be less than the 4% figure. Mr. Blesener introduced the following resolution and moved its adoption: