10-06-1997 WS - Laserfiche WebLink

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. October 3, 1997 To: Honorable Mayor and City Council From: Chuck Whiting, City Administrator Re: October 6, 1997 Council Work Session This meeting has been building up to a lot of subjects to cover, so I apologize for the lengthy agenda but for the most part it should move along fairly well. Here goes: Item 1 - 1998 Budget: I have been able to talk with each of you and will try to touch on issues of concern for next year's budget. Bruce and I have also sat down to once again review any changes that can be made to move this along. I realize this is a daunting task for a relatively new Council, but I do appreciate the candid comments I received. I was also asked to suggest my own recommendations, so of which may come across as opinions and they can be taken for what they are worth. First, it appears there is more consensus on incremental changes rather than large scale changes. Large scale changes would be necessary with elimination of the franchise fee. Still, there is concern over a 6%levy increase. My own opinion is twofold, first, history would suggest that the levy is of more concern to most people, and second, the legislature is more apt to fool around with restricting ioits use than franchise fee revenues. While there is general dislike of the franchise fee for a number of reasons, intuitively it does spread out over more than just property tax payers. Other cities are considering instituting a franchise fee (Blaine) and I don't think it will be that uncommon to see municipalities implementing them. But with the discussion and sensitivities to it, I do think it is prudent to cut back on the rate with the long term idea of reducing it. I asked Bruce to calculate a 1/2%cut for each of the next two years, followed by 1/2% cuts every other year there after until the fee is no longer collected. Planning its reduction will continue to force the city to confront questions of value for service rendered and ability to pay, a practice I think will make for a premium on efficiency. This percentage decrease by the way equals about $40,000 in revenues. Second, despite decreasing the franchise and other shifts of costs to the general fund, a 6% levy increase coupled with the shifts in property classification rates appears more than what the norm has been in Mounds View over the past few years. Bruce is figuring a 3% levy increase, which is about $45,000 less than a 6% increase in levy revenues. After that, a couple of budgeting mechanical items were looked at. First, it has been correctly noted that the City does tend to bring in more revenues than it budgets, and spend less each year than it budgets producing some very favorable year end balances. This leads to questioning about padding. While generally the City should over estimate expenses and underestimate revenues, some of the past year's figures do seem greater than they should have been. Last year we identified some of these that were done as a matter of practice, and we will look again for some and note them Monday evening illto you. Bruce had placed the figure of$75,000 as an ongoing anticipated favorable balance, and will reduce that to $50,000. Another line that contributes to this is the contingency expense, which was