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Regular City Council Meeting Monday,November 13, 2017 Page 4 Councilmember Willmus questioned the actual item being discussed when look- ing at a percentage of increase for the levy at 4.7%, versus the overall impact to the average property, including utility charges, at 2%. Other Council members noted that the current preliminary total impact supported by the Council was 3%. Commissioner Hodder noted that the recommendation was based on recently ap- proved school district referendums and related impacts to taxpayers. In lines 71-72, Councilmember Etten noted that the recommendation was to apply the annual $250,000 to capital needs, while on lines 113-117, staff talks about the importance of a structurally balanced operating budget for the long-term health of the organization. Given this difference in recommendations, Councilmember Et- ten asked the commission to provide their discussion that led to their CIP recom- mendation. Commissioner Harold noted the fair amount of operating reserves currently avail- able, currently far above the target reserve levels. However, as discussed at the last joint meeting, Commissioner Harold noted the number of deficits in the CIP, and therefore, the commission's conclusion and ultimate recommendation was to address CIP deficits in the short-term to reduce long-term implications, as well as recognizing some debt coming off line. Councilmember McGehee addressed her concerns with the nearly$800,000 annu- al use of reserves for the city's operating budget, and asked if the commission didn't also see that as an ongoing problem and priority over the CIP needs. Councilmember McGehee further asked if the commission had specific CIP tar- gets in the three funds currently failing, or was their recommendation to simply to apply the funds to general capital needs. Commissioner Harold agreed that it was an ongoing problem, but in the immedi- ate future, not a priority over CIP needs; and reiterated the commission's support to address short-term CIP needs first. Commissioner Harold advised that the commission didn't specifically discuss which CIP fund, but agreed that the three funds doing the poorest would be the most appropriate to address first. Mayor Roe clarified that the commission's recommendation was for $250,000 annually for three years above that of the City Manager's recommended budget, creating a cumulative affect of an additional $750,000 applied to the CIP in the third year. Commissioner Zeller concurred with Mayor Roe as to the commission's recom- mendation and use of reserves over the next three years. Councilmember Etten noted the impacts if, one year from now, the balance be- tween housing and commercial tax base was reassessed and flipped from com-