07-31-2017 Council Budget Work Session Minutes

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CITY COUNCIL WORK SESSION APPROVED July 31, 2017 46 47 Ms. Cotton explained the new information. Very recently the county changed the 48 valuation numbers for the city, resulting in a decrease of about $20,000 in estimated tax 49 revenue. Ms. Cotton reviewed the 2018 estimate and current proposed budget, noting 50 that the city has utilized reserves in the past and that impact is seen. Mayor Reinert 51 remarked that he prefers to refer to the reserve funds as "surplus". Mayor Reinert also 52 remarked that surplus funds were utilized for debt service on the new fire station and now 53 that the debt service on city hall is paid, that should work out. 54 55 Ms. Cotton asked the council to keep in mind that the street reconstruction debt service 56 will come on line in 2019 and is estimated in the amount of $450,000. Director Grochala 57 added that there are certain improvements (water, sewer for example) that won't be 58 covered by the bonds but will need to be funded. 59 60 The Closed Bond Fund was discussed briefly and there was discussion about what could 61 be expected coming into the fund through retirement of bonds. 62 63 Mayor Reinert said he remains interested in self -borrowing at some level. Council 64 Member Kusterman suggested that it is a good concept but works best when interest rates 65 are higher. The mayor said it would be important to understand possible impact on the 66 city's credit rating. 67 68 Director Cotton, back to Page 1, noted budgeted increases for personnel costs (cost of 69 living raise) and health insurance costs. Mayor Reinert remarked that he noticed a lot of 70 reallocation; Director Cotton concurred and pointed out an example on Page 12 where 71 storm sewer maintenance is transferred out; the funding location works better with 72 scheduling and when that type of work occurs (if it runs to the next year, the budget zeros 73 out). She noted the pages that reflect increases and decreases (contingencies, police/fire 74 capital outlay). The 2018 base budget equals 2017 approved budget less capital outlay 75 plus increased personal services. Additional personnel would show up in the next 76 column, adjustments, not the base. The B4 forms that are on Pages 14 and 15 reflect 77 changes in services. 78 79 Mayor Reinert suggested that the format presented is the best he's seen in his role on the 80 council; he'd like to see percentages included. 81 82 The council reviewed the net tax capacity calculation (Page 3) with the understanding that 83 the figures are subject to change based on new information to be received. Al 85 Mayor Reinert asked for the amount of value increase related to development. Director 86 Cotton said the new construction amount for payable 2018 is $33,000,000 ($23,000,000 87 residental and the rest commercial/industrial) and she will provide the amount of city 88 taxes that generates. 89 2