2002-08-26 CC Worksession - Laserfiche WebLink

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, , . II. Consider other revenue enhancements where appropriate. A.) Do you have fees that are set substantially lower than the cost of the service provided? Now may be a good time to adjust fees to more closely relate to the cost of the service, thereby reducing the current subsidy from other revenue sources. Also, there may be certain property tax supported services for which fees could instead be charged. B.) If your city makes significant capital or maintenance expenditures for storm water control, you may wish to consider creating a storm water utility and removing these costs from the general fund. /11. Consider developing a plan to reduce appropriations or delay future financial obligations as a strategy to cover the potential loss of state aid payments. If aid reductions do not materialize, you could make later adjustments in your budget. A.) Any state aid or credit cuts might not be enacted into law until the session ends, which will likely be in late May. The cuts would likely be applied to the July and December 2003 LGA distributions and to the October and December 2003 MVHC reimbursement payments. Cities will already be nearly five full months into the fiscal year, which means that spending reductions would have to be applied to the remaining seven months of expenditures. B.) You may want to consider budgeting for one-time expenditures that replace long-term ongoing costs, such as technology investments that might replace a staff position or consultant contract. C.) Consider delaying any hiring decisions until the Legislature crafts its budget during the 2003 session. D.) Consider delaying major purchases, as well as delaying new or expanded program initiatives. IV. Consider drawing down reserves to cover the loss of state aid. A.) Carefully consider the periodic cash flow needs of the city before deciding to draw down reserves. City fund balances are generally measured on December 31 of each year. This is a "high water mark" for city budgets given the structure of state aid payments and property tax distributions. An analysis of necessary reserves on a daily or weekly basis would provide a more accurate picture of the city's cash flow needs. B.) State aid and credit cuts could be permanent and, ultimately, the city would have to increase taxes or reduce spending to avoid a long-term city deficit. C.) Drawing down reserves could potentially affect your city's credit rating and possibly increase the cost of future borrowing for the city. r"