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-4- for the City" in any effort to reverse that vote, but the Mayor told him the deadline for such action had passed and the only re- course open would be to lobby for a change in the law. She added that, since -400 residents had indicated through the referendum they didn' t want that direction pursued, Council members had opted not to lobby for further changes in the levy limits. Mr. McMullen said he would oppose any liquor operation which would hurt the quali-ty of life in any area of the City and was concerned that the residential quality of the City be maintained, insisting that principle rather than dollar profit should be considered no matter which site is chosen. He advocated consideration of commer- cial areas first and was "willing to pay more taxes rather than have the liquor operation developed in a residential neighborhood. " Duane Stanley, 3012 39th Avenue N.E. , said he lives directly behind the Twin City Federal building and has noted the increase in traffic down Penrod since drivers go through the bank ' s parking lot in order to bypass the traffic lights on Silver Lake Road. He saw the Council as open to the charge from the residents of contradiction between their stated expectations for the area through the Hedlund PUD and the message they will be conveying if they change their minds and allow a high-volume business with higher traffic generation in the same location now. He also questioned whether the City should be in the liquor business at all and wanted to know just what level of income the City was hoping to generate by updating the liquor opera- tion. • Mayor Haik responded that the City's principle concern is to stay ahead of inflation in order to maintain the existing level of services . Mr. Fornell anticipated yearly expenditure increases for the City of up to $100 ,000 for which the City will only be allowed a six percent levy raise on a 1979 base of $500, 000, which could result in yearly deficit amounting u p t o . $70,000 . He saw the only other "business" alternative to deficit spending would be to raise the rates for water and sewer services, the only other businesses the City has, but this he viewed as taking from the residents in the same manner as raising their taxes . The Mayor agreed that alternatives to maximizing the income potential of the liquor operation would be raising the rates for water and sewer services and cutting out such services as tree trimming, branch removal and edging of the curbs. She saw it as almost impossible to cut the Maintenance staff who i are very flexible about filling in their regular jobs with doing much of the required construction work and repairing their own vehicles and equipment. She also felt the use of Certificate of Indebtedness for equipment purchases was a very costly way of operating.