Agenda Packets - 2011/03/14 - Laserfiche WebLink

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Item No: 11C Meeting Date: March 14, 2011 Type of Business: Reports City of Mounds View Staff Report To: Honorable Mayor and City Council From: James Ericson, City Administrator Item Title/Subject: Administration Reports 1. 2012 Budget and 2011 Personnel Actions The Council and Staff are already beginning to prepare the 2012 Budget based on some of the initial expectations and assumptions expressed by Council members at the February 15th retreat. Staff has been asked to prepare the 2012 Budget without any reliance on LGA or Market Value Homestead Credit (MVHC). While we were able to eliminate LGA from the revenue column in 2011, eliminating both LGA and MVHC would require reducing expenditures in 2012 by an additional $190,000. Assuming no increase in revenues plus inflationary increases in many goods and services, we anticipate a budget imbalance of more than $250,000. While the Council has not yet concluded its analysis of which services are essential, it is presumed that most of what we do will be considered important, if not essential, with very little services that could be eliminated to positively impact the City’s bottom line. To help address the imbalance, I have examined the City’s staffing levels and conclude that we cannot continue to support the same number of staff members as we did when the economy was growing and the market robust. To achieve an appreciable savings in the present year that can be applied to next year’s imbalance, I would propose taking action at the next meeting to lay off one staff member and continue to explore potential cost savings that could be achieved by contracting out specific services. 2. Home Improvement Loan Program Funding Advancement Now that the program guidelines have been established and the mortgage documents approved by the City Attorney, staff at Greater Metropolitan Housing Corporation (GMHC) has started marketing the programs, and already a handful of applications have been given out. To ensure that GMHC has funds available if and when loans are approved and promissory notes signed, they are requesting the City provide a $50,000 advancement into their account. While this is somewhat unusual for the City, GMHC regularly requests and receives advances from all of the communities or organizations they serve. I have consulted with Suzanna Snyder, Program Director with GMHC, who indicates that their organization does not have funds of its own and thus would have a cash-flow issue without the City’s advancement. The funds would be deposited into a segregated interest-bearing account, and loan payments would also be deposited into this account. The alternative to advancing the funds would be to for GMHC to request funding from the Council after every loan closed, however with the City’s just and correct claims process, each loan disbursement could be delayed as much as two weeks. Advancing the funds up front makes more sense from a practical and procedural standpoint. Unless the Council directs otherwise, we would plan to issue the check Tuesday, March 15th.