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Regular City Council Meeting Monday,July 22, 2013 Page 29 Councilmember Willmus spoke in support of the zero percent levy increase sce- nario being considered as an exercise to identify some things that maybe had not yet been identified. Mayor Roe opined that the items had already been identified and expressed his opposition to the motion. Councilmember McGehee noted the reserve fund review done several years ago when the policy was to retain 50% reserve levels, which was subsequently re- duced to 35-45% per LMC recommendations. Councilmember McGehee opined that she had no problem taking 3% off the top and repurposing it; but could not support going any lower than 35%levels. At the request of Councilmember McGehee, Mayor Roe confirmed that the Communication Fund was funded 100% through franchise fees and any reserves were considered restricted funds. Councilmember McGehee observed that only two (2) reserve funds were not re- stricted: the License Center and General Fund, both currently under the 35-45% target level. While Councilmember Etten observed that the Parks & Recreation and Infor- mation Technology Funds were also unrestricted, Mr. Miller advised that, while there were not external restrictions, for management purpose the reserves had been accumulated for specific reasons, and targeting them to use in a different way would create significant long-term impacts. However, Mr. Miller noted that the reserve levels and funds were at the discretion of the City Council. At the request of Councilmember Willmus, Mr. Miller confirmed that staff cur- rently had completed an exercise for budget projections at a 3% levy increase; based on a maximum levy limit budget and levy scenario. Councilmember Laliberte stated that she was not opposed to considering recom- mendations on how to use reserves if the consensus was comfortable going below 43%, with the understanding that this was not something to be done repeatedly or consistently. Mayor Roe opined that this ultimately served to create a deferred tax increase. Roll Call Ayes: Willmus and Laliberte. Nays: McGehee; Etten; Roe. Motion failed.