12/28/2009 Council Packet - Laserfiche WebLink

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• CITY COUNCIL WORK SESSION December 7, 2009 DRAFT 84 5. 2010 Budget — At the last 2010 budget discussion, the council had indicated that they 85 would individually submit budget ideas to Acting Administrator Tesch. Mr. Tesch had received 86 those communications and had forwarded via email a compilation of ideas to the council 87 members. Mr. Tesch had also sent an email to council members outlining current proposed 88 personnel reductions, indicating that an additional $130,000 is available due to those reductions, 89 and reporting on the questions raised by Council Member Elect Rafferty regarding health care 90 budgeting. Finance Director Rolek explained that the health care budgeting calculations have 91 historically been based on the highest coverage costs for each employee, to allow for changes and 92 rising costs. To recalculate that portion of the budget to fund current service levels would save 93 an additional $180,000. 94 The council discussed use of the $310,000 that had become available. There was interest in 95 increasing the contingency as well as increasing the street maintenance budget and the equipment 96 replacement budget. It was noted that the council has had a long term goal of funding equipment 97 replacement on a yearly basis rather than having to finance large purchases, thereby saving on the 98 cost of borrowing the money. The annual target for that program was $200,000 however in 99 recent years the funding has dropped to zero. Funding street maintenance is a good investment to 100 save money in the long term. There was not concurrence to consider a change in the personnel 101 outlook. 102 In view of the proposed change in how the city budgets for employee health insurance, the 103 council reviewed the city's program. It was clarified that employees can change their coverage 104 during the year based on a qualifying life event. With the change to budget at the current 105 coverage level, it was suggested that adding funding to the general contingency fund could help 106 provide for unexpected funding needs in the health care area. The council requested additional 107 information on the type of coverage the city offers to its employees; staff reminded the council 108 that the employee contribution is a negotiated item (for union employees). 109 The following proposal for the unbudgeted funds was suggested by a council member: 110 Add $37,500 to the street maintenance budget; 111 Do not use reserve funds in the amount of $93,377 as originally proposed; 112 Fund equipment replacement in the amount of $110,000; 113 Designate any remaining to the contingency. 114 The council discussed whether or not to include the proposed two -week employee furloughs in 115 the budget. It was pointed out that the furloughs are one -time savings, they are directly in 116 conflict with the concept of investing in people, and there are also pension implications. The 117 council decided to leave the two -week furlough in the budget but with the understanding that 118 employees should take no more than one week in the first half of 2010 and that the council is 119 committed to making removal of the second week the first action if other budget cutting methods 120 are determined. 40 121 The council will continue consideration of the 2010 budget immediately in January. Staff is 122 encouraged to begin reviewing any and all ideas (staff and council) for budget savings as soon as 123 possible.