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City Council Regular Meeting —12/04/06 DRAFT Minutes - Page 4 Mr. Miller further advised that, while the proposed increases as outlined above, were a start to shore up funding mechanisms, they would not solve the entire problem, with ongoing depreciation of rolling stock (vehicles) antVor park equipment and amenities. Discussion included replacement costs for Police, Fire and Public Works vehicles; and use of interest monies earned on reserve fund principal to reduce the overall levy. Councilmember Ihlan opined that there were competing budget policies that the City Council was attempting to address regarding use of reserve funds; and further opined her preference to phase in reserve funding as well as asset replacement to obtain a levy increase closer to four percent (4%), rather than exceeding the rate of inflation. Mr. Miller confirmed that the stronger the reserve level, the more interest earnings were available to reduce the overall levy; with use of 100% of reserve interest earnings for current, ongoing spending to reduce levy increases. Councilmember Maschka noted the success of the PMP and the original $12 Million originally dedicated in 1997 for the street improvement program; with annual earnings keeping the City's rebuilt streets well-maintained to increase their life expectancy. Councilmember Maschka further noted that, by removing those $12 Million in dedicated PMP funds that would put the City's reserve funds in line with that recommended by the State Auditor. Mr. Miller confirmed that those PMP funds were restricted to street improvements to avoid the need to bond for such maintenance. Mayor Klausing closed the Truth in Taxation Hearing at 6:47 p.m.; canceling the Continuation Hearing; moving forward to the subsequent hearing scheduled for Monday, December 18,2006. Approve Agenda Approve Agenda Mayor Klausing called for any comments or discussion on