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Department Approval <br />��. .�: �� <br />Item Description <br />l�'�, <br />Jy <br />REQUEST FOR COUNCIL ACTION <br />Date: 4/13/09 <br />Item No.: 12.a <br />Acting City Manager Approval <br />Consider an Alternative Sudgeting Process for 2010 <br />��� <br />BACKGROUND <br />Over the past couple of months, the City Council has held 3 separate discussions on the merits of using an <br />alternative budgeting process for 2010. Within these discussions, it was noted that one of the fundamental <br />changes that is needed is the prioritization of City programs and services. To assist in that process, it was <br />recognized that the City would benefit by having an understanding of the costs associated with providing <br />these services. Some Councilmembers also expressed an interest in a process that would better engage <br />citizens, advisory commission members, or other interested parties. <br />The need and urgency for an alternative budget process can also be portrayed from a financial perspective. <br />Here are just a few of the challenges facing the City for 2010 and beyond: <br />❖ Cash Reserves are strong in some areas, but have consistently declined since 2001. Reserves in <br />key operating funds are approximately $3 million below recommended levels. <br />❖ The City has no money set aside to repair/renovate general city facilities. <br />❖ The City's asset replacement funding mechanisms are structurally imbalanced. Sased on current <br />replacement schedules: <br />• The City's Vehicle Replacement Fund will run out of money in 2009 <br />• The City's Street Replacement and Park Improvement Replacement Funds (if combined) will <br />run out of money in 2013 <br />• The City's Water, Sewer, and Golf operations will run out of money in 2014. <br />❖ The 2010 Sudget Gap includes, but is not limited to: <br />•$ 400,000 Loss in State Aid <br />•$ 200,000 Use of one-time monies for '09 Sudget <br />•$ 400,000 Replenish vehicle replacement funding to '08 level <br />•$ Additional funding for unfunded mandates, inflation, salaries, benefits <br />•$ Additional funding for unfunded asset replacements <br />•$ Additional funding for strengthening cash reserve levels <br />•$ Additional funding for Fire Relief Assoc. unfunded liability <br />Page 1 of 3 <br />