Agenda Packets - 2010/01/11 - Laserfiche WebLink

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Mounds View City Council December 7, 2009 Truth in Taxation Meeting Page 6 1 Finance Director Beer reviewed the cuts the City had already made: $414,000 in expenditures, 2 using $250,000 of the Levy Reduction Fund, a levy increase proposed of $38,000, and using 3 $133,000 in fund balance. He noted the Council could transfer more from the Levy Reduction 4 Fund but is already dipping into the principal. He stated the Council can cut expenditures but 5 anything of significance has already been cut, so what is remaining is to cut staff. 6 7 Council Member Mueller stated she remembers a past conversation about reducing a franchise 8 fee and that fee reduction equaled about $38,000. That decision was made about 18 months ago 9 and it angers her to have a debate now about $39,000 when both she and Council Member 10 Stigney had recommended the franchise fee be left as it was. She stated the Council has come 11 together several times to compromise, reduce the 2010 budget, put off capital expenditures, and 12 some equipment purchases budgeted for 2010. Council Member Mueller stated the City has been 13 fortunate to have a Levy Reduction Fund for the last five years and will be using it again this year 14 but Finance Director Beer is saying it is tough when the principal is used and to still get interest 15 earnings and hold a great bond rating. Council Member Mueller stated if things are as desperate 16 as they seem, the City may have to look at suspending a street project. If that occurs, then 29% 17 will not be spent for consulting or the cost of the street project but the consequence is increased 18 maintenance costs to those streets and the long-term effects of decisions being made. Council 19 Member Mueller stated the Council has to weigh this carefully, look at the “big picture,” and 20 figure out the best way to move forward. She noted there may be some tough decision in the 21 future to limit or lay off staff, cut back hours, or not purchase necessary equipment, as long as 22 essential services are maintained. But, based on the surrounding communities and benefit of the 23 last four years, she thinks a 1% living increase is entirely reasonable because people want water, 24 snowplows, police officers, and fire trucks to arrive when needed. Council Member Mueller 25 stated she thinks the levy is ready to be approved. 26 27 Council Member Hull suggested the Council push for furloughs to cut one or two days per month 28 for 50 employees. He noted the City is already short staffed so there will be no layoffs and 29 maybe there could be a small use of fund reserves ($15,000 to $20,000) that are replenished at a 30 later point. Council Member Hull stated he thinks a levy increase of 1% is fair but would agree 31 to additional cuts because the City will be unalloted more funds and the worse is yet to come. 32 33 Council Member Stigney stated the Council should definitely look at a 0% levy, felt $40,000 was 34 a significant amount, and this is what the Levy Reduction Fund is for. He felt the City can 35 maintain its staff but he does not support hiring a Supervisor. Council Member Stigney agreed 36 the Council needed to look at staffing, furlough, or a shorter work week because personnel costs 37 are the highest cost for the City. 38 39 Mayor Flaherty stated: we are living in extraordinary times, nothing like it since 1932, and 40 residents are feeling the burden of lost jobs, values going down, cuts in pay, or making 41 concessions at their jobs, so any levy increase sends the wrong message in how the City is being 42 run. He stated he is a member of the Mayor’s Association and believes Mounds View is in very 43 good shape when compared to other cities that are cutting staff and public safety and closing City 44 Hall for a day or two a week. Mayor Flaherty stated eventually taxes will have to go up but that 45