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P28 CITY COUNCIL BUDGET WORK SESSION August 22, 2011 DRAFT 46 information is available. Other items on the list — organizational assessment, janitorial 47 services, civil and criminal legal fee reductions — have been discussed previously and 48 either haven't changed or are already in place. The gap noted is $51,811. 49 50 Health Insurance — The council discussed further the pending health insurance increase. 51 The 14 to 18 percent increase anticipated seems high considering what some other cities 52 are seeing. Administrator Karlson noted that he is investigating the ranges of increases 53 and feels that the proposed budget is conservative; he has also looked into getting 54 additional bids. A council member suggested that efforts need to continue in all areas to 55 keep the health insurance costs as low as possible. Mr. Karlson added that although the 56 council has already directed an increase in the employee contribution for family coverage 57 and lowered the amount offered for waiver of coverage those changes are not reflected in 58 savings for the gap because it is very possible that some employees who took the waiver 59 may change to taking a family plan. 60 61 Fund Reserve - Finance Director Rolek explained that the end of the year surplus funds 62 become part of the city's general fund balance. That general fund balance is currently at 63 about a 57% level but it has been reducing over the past few years. The capacity to build 64 that reserve is only budget surplus and that isn't sustainable. One council member 65 equated the reserve to a "rainy day fund" and suggested that the council may want to 66 consider if the current situation is in some ways that rainy day. Staff was directed to 67 bring forward a fund reserve policy for further council discussion. 68 69 Other Questions - The council asked, what are the "big rocks" out there (in terms of the 70 increase in the budget)? Mr. Rolek suggested the health insurance increases, a two 71 percent cost of living increase for staff, increase to capital equipment replacement budget, 72 street maintenance budget increase (all as noted in the memo introducing the budget 73 book). The savings end of the budget are those things noted on the gap sheet. 74 75 A council member noted his desire to see the budget levy lowered. 76 77 The mayor suggested that the meeting provided a good high level discussion of the 78 budget. For the next meeting, he suggests members do individual research and come 79 prepared to drill down the numbers. The council will meeting again at a special work 80 session on August 31, 2011 at 5:30 p.m. 81 82 The meeting was adjourned at 8:50 p.m. 83 84 These minutes were considered, corrected and approved at the regular Council meeting held on 85 September 12, 2011. 86 87 88 89 Julianne Bartell, City Clerk Jeff Reinert, Mayor 2