02-19-91 Special CCM - Laserfiche WebLink

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LAKE ELMO CITY COUNCIL MINUTES SPECIAL MEETING FEBRUARY 19, 1991 Mayor Johnson called the special meeting to order at 4:38 p.m, in the City Council chambers. Present: Player Johnson, Hunt, Dick Johnson, Mottaz, Williams, Administrator Kueffner and Finance Director Banister. Mayor Johnson called this special meeting to discuss a potential budget crisis and asked that the City consider both the immediate and the long term implications of the deficit. Johnson requested we join other cities in lobbying at the state capitol for relief from the budget crisis. Mayor Johnson reported, "The League of Cities has been advising us since early January that there were proposals afoot by the new governor addressing the state governments deficit of $197 million in the current fiscal year and $1.2 billion more in 1992 and 1993. The Governor has proposed that cities take a hit this year to the tune of reducing local government aid 2.2 percent. That proposal has since been passed. That means $17,000 to the City in the current fiscal year. We could be looking at cuts over the next two years that could range up to $170,000. We will be losing around $32.,000 from our Section 32 revenue base." Finance Director Banister explained that Lake Elmo depends heavily on property taxes for this revenue. The state will increase its own revenue by withholding more of the property taxes it collects for cities. We can do it for 1991, but we'll have to make up for it in 1992. Mayor Johnson indicated the $17,000 cut was something the City could handle in the current budget assuming nothing goes wrong. However, he saw a potential for some disaster such as one of our businesses leaving town or another one going out of business. They provide people for our volunteer fire department and we may then need to contract for fire protection. Councilmember Dick Johnson couldn't believe that the state legislature was going to hit the city with these cuts without some change in the levy limits. He asked the Finance Director for monthly reports on expenses by the consultants. M/S/P Hunt/Williams - to direct the budget committee to meet the month of March and report back in April. (Motion carried. 5-0). M/S/P Williams/Hunt - to amend the motion to include charging the budget committee with coming up with a three year plan to deal with the proposed budget problems. (Motion carried 5-0). M/S/P Hunt Williams - to adjourn the special city council meeting at 5:30 p.m. (Motion carried 5-0).