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Regular City Council Meeting Monday, December 15, 2008 Page 23 implications were considered; and City Manager Malinen provided, as a bench handout, one additional memorandum from Parks and Recreation Director Lonnie Brokke to Councilmembers. Councilmember Willmus clarified that the HRA had further reduced their levy re- quest for 2009 by another $50,000; with staff confirming that action. Councilmember Ihlan, while recognizing staff's significant strides in further re- ducing the levy increase, and their. responses to her additional questions and in- formation requests; opined that the City Council was potentially within striking distance of a zero levy increase, further opining that Councilmembers should strive to reach that goal. Councilmember Ihlan noted comments from residents at past meetings, and the need for the City to be sensitive to taxpayers under the. cur- rent economic situation. Councilmember Ihlan suggested that Councilmembers concentrate on deferring and reducing the proposed equipment and vehicle re- placement allotment of $340,000 for 2009 as a significant portion of bringing the levy down further. Discussion ensued among Councilmembers and staff regarding specific vehicles and equipment; department priorities; age of the City's rolling stock; impacts of past deferrals; adherence to the City's budgetary policies for funding capital ex- penditures; and "catch up" provisions from past deferment practices. Mayor Klausing sought input from City Manager Malinen on how staff had calcu- lated their recommended reductions; why the vehicle and equipment fund had not been a specific item recommended by the City Manager; and impacts to depart- ments and future years' capital expenditures by reducing the 2009 set aside. City Manager Malinen responded that the replacement funds for equipment and rolling stock had been tight over the past few years; and one of the City Council's goals last year was to improve funding. City Manager Malinen noted that all of the funds for capital expenditures were not tax-supported; and in the City Coun- cil's attempt to eliminate acquisition, there was not always a dollar for dollar im- pact on the tax levy. Mr. Miller concurred with City .Manager Malinen's .observations; noting that monies from annual budgets were deposited in vehicle and equipment replace- ment funds so replacement of major items did not impact a single annual budget and levy. Further discussion included depreciation charges; systematic funding over a pe- riod of years for major capital expenditures; annual differentials based on equip- ment needs; and deferring vehicle replacement for 2009 by not funding their re- placements for one year.