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City Council Study Session Minutes 21 August 14, 2001 • Page 7 .1 Councilmember Thuesen stated the City would be playing the shell game with the State 2 as funding has been taken from the City and given to the State.. He noted all programs .3 need to continue as is and noted the budget was only increasing 3% overall. 4 Mayor Cavanaugh stated the residents would be affected the most by this levy to 5 maintain the same level of services. He indicated the fire department budget has not been 6 fully addressed with this budget with new State requirements. He explained the model 7 has been broken because the typical sources of revenues have been altered and are now 8 expected to be collected from the residents. Mayor Cavanaugh indicated he felt there 9 should be no more than a 10% levy and noted he feels the Council may have to review 10 how they provide services. 11 Mayor Cavanaugh indicated the City would not thrive in the future with no surplus 12 funding left after the years' end. He explained the City would not be able to build 13 reserves if this is the case. Mayor Cavanaugh advised staff to revise this budget and 14 report back to the Council. 15 Councilmember Hodson noted he disagreed with the Mayor's comments and noted each 16 City is having difficulty with the regulations this year and stated he does not want to see 17 services cut from the budget. He indicated he understood that services would not be 18 added, but stated in the future other funding sources could be sought to build reserves and 19 to increase services provided to the residents. 20 Mayor Cavanaugh questioned why the $112,000 in budget reserves was being used at an 21 administrative level. He indicated he felt the use of these funds was not allowable as 22 future needs may require these funds. City Manager Morrison stated this fund was 23 created from surpluses in administrative funding. He indicated these funds are being used 24 to assist in expenditures and noted the tax levy at 25% would be a one time high to help 25 the City adjust for the loss of HACA and LGA State Aid Funding. 26 Councilmember Thuesen stated he feels this budget was reasonable and stated he felt the 27 services provided would be similar to 2001 with only a minor incremental increase. 28 Mayor Cavanaugh stated he felt the increase was outrageous and he noted he would not 29 support it at this time. He explained he felt the Council could do better for the residents. 30 Mayor Cavanaugh noted the City has residents on fixed incomes that would not be able 31 to handle the sizeable increase. He indicated he felt the staffing of the City needs to be 32 addressed. 33 Councilmember Thuesen stated he feels staff is providing high quality services to the 34 residents at this time and noted a cut in their fees would not increase their level of 35 service. He indicated he did not like the Mayor questioning staff s level of efficiency for • 36 the funding they are provided. 37 Councilmember Sparks questioned if the $112,000 budget reserves could not be used for