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Special City Council Strategic Planning Meeting Saturday, February 7, 2009 Page 17 Further discussion included current City Manager-mandated actions in freezing hiring and freezing purchases of rolling stock. Councilmember Johnson noted that he had yet to hear one department manager at the table mention whether salaries were being frozen, or if the proposed COLA was not a discussion item. Councilmember Johnson recognized the difficulties in managing a business and difficult decisions to be faced related to employee compensation and relations; however, noted that the City Council did have control over this issue, while it may not have control over other complex and mandated government issues. City Manager Malinen advised that the final 2009 budget levy included a 2.9% COLA to avoid impacting employees in the current economic situation, and to restructure what staff functions were being performed. However, City Manager Malinen opined that this was a legitimate conversation, questioning how long the City could meet COLA increases in this economy; and noted that the other side would be short- and long-term ramifications to the organization itself and quality of employee it retained. Further discussion included complications with union contracts and negotiations; how to balance layoffs and/or wages and the need for discussion and flexibility of all parties at the negotiating table; the need for the City Council to guide that discussion; and potential impacts for management staff salary freezes; and the need for public discussion of all salaries, no matter what level. Ms. Gourlay noted several consensus recommendations from previous discussions: ^ Use reserves judiciously if at all ^ Seek maximum revenue sources ^ Avoid short-term gain reductions with long-term impacts ^ Include all salary levels in discussions Councilmember Ihlan opined that the City should not use reserves to resolve the deficit from the reduced MVHC; since this was not ashort-term problem, and would make those reserves unavailable for use in the future when they may be needed for more drastic situations. Councilmember Ihlan opined that Roseville was in much better shape from the loss of state aid than many other communities across the state; and that given the tiny impact to Roseville citizens, she was shocked to hear Councilmembers discussing raising taxes for citizens. Councilmember Ihlan noted that this would add further injury to citizens already dealing with unemployment, or potential unemployment issues; declining property values; and now the City was contemplating asking taxpayers to pay more taxes. Councilmember Ihlan opined that reducing services should be the first option, rather than using reserves, since conditions should already be built into the structural budget. Mayor Klausing concurred with Councilmember Ihlan's reluctance to use reserve funds. Mayor Klausing noted that the City Council had two (2) options: 1) Spend reserves; or 2) Reduce the Budget