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Regular City Council Meeting Monday, September 12, 2011 Page 21 c. Consider Resolutions Related to Adopting the Preliminary 2012-2013 Not-to- Exceed Levy Mayor Roe clarified that tonight's action was for a preliminary, not-to-exceed levy, but the budget could be revised. Mayor Roe further clarified that it was prudent to note that, at the time this preliminary levy was being set, public hear- ings on approved bond issues had yet to occur; and suggested that the City Coun- cil take this into consideration in their deliberations as they considered a not-to- exceed levy. Finance Director Miller clarified that, if the City Council chose to issue the bonds in 2011, the levy could be increased above and beyond what was set tonight. However, in looking at the timing for a bond issue, Mr. Miller advised that he wasn't sure if the issue would be ready to proceed until 2012; and more than like- ly, he anticipated that the repayment structure would come on line in 2013 and be addressed during next year's 2013 budget discussions. Councilmember Johnson clarified that there was no concern or bearing on taking possession of bond money and using it in 2012; with Mr. Miller concurring. Mayor Roe clarified that Mr. Miller's recommendation was to not include the bond issues in the levy at this point, to which Mr. Miller responded affirmatively. At the request Mayor Roe, City Manager Malinen briefly summarized the RCA dated September 12, 2011 and requested action, based on actions taken to-date during budget discussions and rankings. Mr. Malinen advised that this included his most recent recommendation to the City Council, based on state changes in eliminating the Market Value Homestead Credit (MVHC) to split those proceeds to restore some of the reductions and eliminations in the previous iteration based on a City Council directive for a 3.4% levy increase. Mr. Malinen opined that it was prudent to retain that proposed level of increase for the preliminary, not-to- exceed levy as the City Council and staff continued to refine the final budget over the next three (3) months prior to adoption of the final budget and levy in Decem- ber. Mr. Malinen recognized the concerns of the City Council for funding the Capital Improvement Program (CIP) and Park Improvement Program (PIP); and opined that by retaining the higher levy increase, and combined with his previous recommendations, it would provide a sufficient cushion until it was determined how to best address those issues. Councilmember Pust noted that, on line 2 of the memorandum (lines 43-50), she was having difficulty tracking numbers from past iterations; opining that she was sure the public was having trouble tracking them as well; and asked that Finance • Director Miller provide a quick rundown for each specific line.