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ARDEN HILLS CITY COUNCIL—December 13, 2010 12 7.A. Adoption of the Final 2011 Budget and Tax Levy (continued) Special City Council meeting. The 2011 Proposed Budget has projected revenues of$10,218,392 and projected expenditures of $13,060,056. This budget includes expenditures and revenues across all funds. The General Fund budget is proposed at revenues of $3,897,217 and expenditures of $3,917,217. The only changes in the proposed budget that came out of the November worksession are the reduction of$28,000 in expenditures and the use of$20,000 of reserves as directed by the City Council. This reduces the Proposed Property Tax Levy from $3,088,964 to $3,040,964 resulting in a 0.8% increase over the 2010 Property Tax Levy. There were no changes made to the proposed Capital Improvement Plan (CIP) presented at the November worksession. Mayor Harpstead stated that the budget is not balanced due to the projected revenue and projected expenditures in the Capital Improvement Plan Fund and is a result of the pavement management projects. These funds are received through special assessments and some of these funds are used for the capital improvement of the infrastructure of the City and the public utilities area. Councilmember McClung asked if this budget includes cost of living increases for Staff. Director of Finance and Administrative Service Iverson stated the contingency includes a 2% cost of living increase as directed by the Council. The City has not finished union negotiations and is unsure of the results of these negotiations at this time. The actual budget contains a 0% increase and any increases the Council may choose to do that would affect the General Fund are in the contingency funds. City Administrator Klaers clarified the contingency reserve is $20,211 and this is included in the levy amount. MOTION: Councilmember Holden moved and Mayor Harpstead seconded a motion to Approve the 2011-2015 Capital Improvement Plan (CIP) as presented...._ _. esented. The - motion carried unanimously(5-0). MOTION: Councilmember Holden moved and Mayor Harpstead seconded a motion to Adopt Resolution 2010-078: A Resolution Adopting the Proposed 2011 Budge in the Amount of$13,060,056. Councilmember Holden stated the City's budget has been really looked at by the Council and the result is less than 1% increase. She stated the City's costs could be lowered if the costs of public safety services would not continue to increase. Councilmember Holmes did not like the use of the City's reserves. She also stated she would like to look at the costs associated with public safety services to determine if there were additional cuts the City could make so that the City's reserve funds would not have to be used. Councilmember Grant stated the City has made substantial progress in the levy but the City cannot continue to operate under the cost of inflation. The Council has been very sensitive to the economic times and he would not propose to go higher but he also could not support going lower.