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COUNCIL SPECIAL WORK SESSION September 14, 2015 <br />APPROVED <br />be bringing in new revenue and the city needs to prepare for the needed services for it <br />and that means spending some money up front. <br />The council discussed the city fund reserve level and policy. Finance Director Cotton <br />explained that the fund reserve percentage is tied to budget and not to the tax capacity so <br />it is a fixed number. <br />Council Member Stoesz noted an Economic Development line item and budgeted funds <br />of $100,000. Community Development Director Grochala explained that a portion of <br />that line item is the marketing tax that comes in and goes out ($57,000). Past that it <br />funds professional services from Springsted and Kennedy and Graven and also an intern <br />position. Council Member Stoesz asked if there is a measure of success for utilizing <br />those funds. Mr. Grochala explained that having the professional services available <br />means that the city is prepared when approached on a project. <br />Mayor Reinert discussed the Police Department budget, and specifically the increase <br />between years 2014 and 2016. Public Safety Director Swenson reviewed the amount of <br />the increase related to personnel (including reallocation of the cost of certain positions) <br />and positions added since 2014 (including a grant funded position). The mayor also <br />reviewed the Fire Division budget and received an explanation of the changes from 2015 <br />to 2016 (fleet, personnel). There was a review of the funds anticipated from the <br />Centennial Fire District (capital). Staff anticipates the use of some of those funds for the <br />future purchase of equipment so that bonding will not be necessary. The mayor indicated <br />that a thorough discussion of the capital expenditures/equipment plan will be necessary. <br />Administrator Karlson explained that the council will need to establish a preliminary levy <br />number by September 28. <br />Council Member Roeser noted information relative to the net tax capacity and related <br />calculations. In order to maintain an approximate three percent increase, $800,000 in <br />savings or revenue need to be identified. He proposed some from the reserves and some <br />from the closed bond fund (to pay new bonds). Administrator Karlson noted that the use <br />of reserves is already included in the calculations ($323,000). Finance Director Cotton <br />remarked that the action required to utilize reserve to cover debt service would be for the <br />council to cancel the debt service levy. The mayor said he feels comfortable utilizing <br />$600,000 from the closed bond fund. Other reserve funds were discussed, such as office <br />equipment replacement and computer server replacement. Administrator Karlson <br />suggested caution in utilizing fund reserves since they are a one-time source and <br />therefore cause a gap in following years. They also can be depleted and can be difficult <br />to rebuild. Council Member Roeser suggested that the city is facing something of <br />anomaly, having grown but not seeing any increase in valuation; he does not think that <br />will repeat itself next year. Mayor Reinert noted that there was naturally a spike in <br />getting the fire service started but that will pass and the cost of the services will actually <br />be less and growth in the tax base is also anticipated. If there is an issue with the <br />following year, the council will do what it has in the past and make the necessary <br />adjustments based on real needs. <br />2 <br />