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ARDEN HILLS CITY COUNCIL—December 13, 2010 13 7.A. Adoption of the Final 2011 Budget and Tax Levy (continued) Mayor Harpstead stated taking money from the reserve every year is not a good trend and the City should keep this in mind for the future. The amount being proposed is modest and the City can tolerate this amount being removed from the reserve. He clarified he would support the proposed budget. Councilmember McClung stated he believed there was room for the City to make additional cuts. The motion to approve Resolution 2010-078 was called to a vote. The motion carried unanimously MOTION: _Mayor Harpstead moved and Councilmember Holden seconded a motion to Adopt Resolution 2010-079: A Resolution Setting the Final Lew for Taxes Payable in 2011 in the Amount of$3,040,964. MOTION: Councilmember McClung moved and Councilmember Grant seconded a motion to Amend the Final Levy for Taxes Payable in 2011 to the Amount of $3,016,465 (the amount levied in 2010). Councilmember Grant asked Councilmember McClung where he would propose the cuts come from. Councilmember McClung suggested the cuts could come from the contingency included in the budget and take the difference from the reserve funds. He stated the City could freeze all salaries for the next year. He would support the step raises based on performance but would not support any cost of living increases this year. Councilmember Grant stated the amount of the contingency was based in part on the union - contract negotiations. He clarified that if this money was not in the budget then the City would not have flexibility when negotiating this contract. Councilmember McClung stated it is possible to have a 0% increase in year 1 and negotiate a slightly larger increase in year 2 or year 3. Councilmember Holden stated Arden Hills pays an average salary compared to surrounding cities. Surrounding cities are providing employees increases and if Arden Hills is not able to compete with this then the City will loose valuable employees in the future. She stated she would like to see Arden Hills as a destination City for qualified employees rather than a City for training qualified employees to work in other cities. Mayor Harpstead stated he would vote against the motion to amend as well. The cost impact to the City from the public safety increases exceeds the amount of the increase for the levy. The City is already not doing things within the City that have been done in the past in an effort to cut costs. The community is well managed and appropriately budgeted at this time.