07-27-2020 Council Work Session Minutes 2

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CITY COUNCIL WORK SESSION 88 Mayor Rafferty asked if the broken electronic sign in front of the civic complex could be 89 fixed because it's delivering a message that could be linked to the pandemic. He also 90 supports audio/video in the hallway outside the council chambers as a project that is 91 needed due to space limitations inside the council chambers. 92 93 Administrator Cotton asked the council to review those projects being suggested and let 94 staff know if they have concerns. The council indicated approval to move forward and 95 Ms. Cotton suggested that the council will eventually have a resolution that encompasses 96 the City's program. In the meantime,the council will begin seeing individual project 97 actions coming forward. 98 2. 2021 Draft Budget& Tax Levy—Administrator Cotton reviewed budget 99 information before the council. Staff will give a presentation and plan to provide 100 additional updates in the future. Ms. Cotton's presentation included information on: 101 - The council must adoption a preliminary tax levy by September 28t' (a 102 maximum); the final budget is normally adopted at the first meeting in December; 103 - Draft budget and levy amount noted, representing a 9% increase from 2020; 104 - Budget does include assumptions (COLA increase, health care cost increase, life 105 and disability, work comp); 106 - Summary of what is the base budget reviewed; Costs in addition to the base are 107 added and that becomes the proposed 2021 budget; 108 - A gap analysis is included that provides a year over year change view; one time 109 revenue utilized in the 2020 budget are a driver in the gap; 110 - Market value information noted; Anoka County isn't providing data well at this 111 point due to a technology upgrade; a five percent assumption is included 112 representing just over$500,000 in additional tax revenue; tax payments are 113 strong for 2020 but there are unknowns for 2021 collections; Councilmember 114 Ruhland noted concern about commercial tax collections based on the impact of 115 COVID; 116 117 Councilmember Lyden asked about use of reserves in 2021. Ms. Cotton noted that the 118 reserves were one-time revenue and it would be difficult to move to reserves again. Ms. 119 Cotton noted funds committed but not used in a previous year to a City recreation 120 complex ($375,000) and a veterans' war memorial ($50,000); those funds could be 121 directed to another use. Public Services Director DeGardner recommended that the 122 $375,000 be transferred to the Parks and Trails funds for use over the next three years. 123 124 - Debt levy review, noting that Street Reconstruction Program projects will be 125 coming forward on a planned basis; 126 127 Councilmember Stoesz asked, would it be appropriate under an emergency situation to 128 utilize fund reserves below the fifty percent threshold? Ms. Cotton explained that such a 129 use would need to be a recognized emergency and a plan should accompany on how 130 funds will be restored. Staff also explained that the use of reserves has been scrutinized 131 by the rating agencies so it's recommended that the structure of actual revenues balanced 3