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Special City Council Strategic Planning Meeting Saturday, February 7, 2009 Page 15 Anticipated MVHC-Specific Reduction = $20,000 Mr. Malinen advised that reductions would be made to the City Council budget (i.e., recognition programs); and overall reductions and cost savings that shouldn't prove too draconian; and noted that he would be delivering City Council Agenda packets on Fridays, rather than CSO's. Recess Mayor Klausing briefly recessed the meeting at this time. Outcomes of Department Discussions/Impacts City Manager Malinen concluded that, while not getting into too much minutiae, residents and clients would begin to see and feel impacts from the current budget; requiring development of a strategic plan immediately as a first step, prior to looking at longer-term steps. City Manager Malinen sought direction from the City Council on their preferences to respond to impending MVHC cuts, not specific, but at least indicative of the direction staff should pursue; where there was room to adjust service levels or make cuts, prior to transitioning into broader outcomes. City Manager Malinen advised that the current hiring freeze was allowing the City to hold its own, allowing time to address other issues. Mr. Malinen noted the difficulties created when City Council's had already set their 2009 budgets in 2008, to then be notified of pending reductions from the state; however, he advised that his rationale was the hiring freeze to allow time for things to be determined at the state level, while not impacting the City any further in the meantime. Discussion included support for and. participation in lobbying efforts by cities at the State level to support not reducing aid or housing credits; status of the 2009 budget as "bare bones" before this latest development in balancing the state budget; pros and cons of using reserves based on service reductions and long-range impacts (i.e., repairing streets now or setting aside depreciation costs for future capital purchased); and preparing for additional need for using reserves until the economy situation began improving, which maybe several years away. Councilmember Roe opined that the state misinformed the taxpayers regarding MVHC and needed to step up to the plate in defining LGA and MVHC as they were intended, even if not politically enticing. Councilmembers Roe and Pust cautioned the City Council to prepare for additional budget cycle needs over the next few years, and potential use of reserves during that time, based on a long-term approach versus ashort-term need, and how to determine the wisest drawdown of those reserves over that long-term and foreseeable future. Things of note that would provide long-term savings, based on staff reports and comments, included payroll accounting streamlining and reporting efficiencies; reallocation of maintenance