06/11/2012 Council Packet - Laserfiche WebLink

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P 2 2 CITY COUNCIL WORK SESSION May 21, 2012 DRAFT 43 • Proposed Levy Cap ( ?) 44 Mr. Karlson stated that last year the city faced a budget gap of about half a million dollars 45 but met the challenge to not raise taxes. That did require the use of some surplus funds. 46 For this coming year, the management team is discussing all of the above items (he 47 reviewed the list). Based on possible expenditures and a reduction in revenues, the 2013 48 budget gap with the tax levy unchanged would be about $864,000. 49 The mayor suggested that a two percent wage increase projection isn't accurate according 50 to current discussions. 51 Council Member Roeser recalled, regarding the salt storage facility, that the city has an 52 outstanding grant to implement an alternative; wouldn't that eliminate the need for a salt 53 storage facility? Public Services Director DeGardner explained that the salt facility 54 would still be needed and that the project would be financially advantageous to the city. 55 Council Member Rafferty asked about the proposed increase in the Capital Equipment 56 Replacement Program and staff explained that there is a plan is place to reduce /eliminate 57 the cost of bon-owing for equipment replacement by fully budgeting for the costs rather 58 than borrowing. Each year the amount committed to purchase is being increased. 59 Council Member Roeser asked if there is outstanding debt that will be retired soon thus 60 ending budget obligations for debt service? Mr. Rolek explained there won't be debt 61 retired until after 2013. 62 Council Member Stoesz asked about the possibility of leasing equipment and Mr. Rolek 63 explained that leasing options have been explored in the past and not found to be a good 64 option. 65 5. Summary of Fund Balance 66 Finance Director Rolek then distributed the most recently considered (but not adopted) 67 Five Year Plan. He noted that the city hasn't officially begun the 2013 budget process. 68 He directed attention to the estimated levy figures and projections included within those 69 figures. The figures include increased costs in terms of such things as tools, contracts and 70 personnel costs. The other items that would have an impact (as had been noted by 71 Administrator Karlson) are also included in the projections. When the mayor asked if a 72 surplus is anticipated in 2012, Mr. Rolek said no and added that the upcoming audit 73 report will include information on the fund reserve (accumulated surplus) that was 74 budgeted for use in 2012 and how much has been spent. Mr. Rolek then distributed a 75 fund surplus analysis and reviewed how the surplus has ranged from 1998 until present as 76 well as those items projected to impact the 2012 surplus. 77 6. 2013 Budget Priorities 78 Administrator Karlson said staff is asking the council how they would like the city to face 79 a likely budget gap and to identify their priorities if there are to be budget cuts. The 80 mayor suggested that what the council has done in the past is to find efficiencies and to 81 bring the level of resources authorized down to the level of activity in the city. The 82 mayor further suggested that the council will have to see the numbers before they can 2 • •