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City Council Study Session — 05/17/04 <br />DRAFT Minutes - Page 17 <br />Councilmember Ihlan questioned whether the proposed increase <br />of $700,000 was sufficient to reflect increased health care costs; <br />inflation rates; increased fuel costs; and other items staff may <br />identify. Councilmember Ihlan further suggested staff identify <br />areas or expenditures that may be increasing faster than others, <br />and needing to be addressed in addition to the structural budget <br />fix. <br />Councilmember Maschka noted that in his research, his <br />observation was that the real cost of local government had gone <br />down. <br />Mayor Klausing cautioned that, if Council consensus was to <br />proceed as recommended by Councilmember Maschka, he didn't <br />want to remove any incentives for staff to look at additional cuts <br />available in operations; and that part of the calculation should be <br />to look at structural changes to realize savings. <br />City Manager Beets shared some observations he'd made from <br />decisions made last year on a staff level, specifically noting the <br />reduction in depreciation charges in order to cut costs, opining <br />that in hindsight, he didn't think that represented a long-term <br />structural solution for the City and needed re-evaluation in each <br />department to ensure that the City's "rolling stock" addressed the <br />City's needs. Mr. Beets further addressed Council comments <br />related to incentives to consider additional cost savings, noting <br />that each program and service would be evaluated, alerting the <br />City Council to potential controversial areas and <br />recommendations from staff; and the City Council's policy- <br />making decisions resulting from those recommendations. <br />City Manager Beets requested additional Council direction <br />related to any non-levy revenue sources staff should explore (i.e., <br />franchise fees to compensate the public for major utilities' use of <br />city-owned rights-of-way to further their business). <br />Discussion ensued with no obvious consensus. Comments <br />included whether the fees were simply another form of taxation; <br />direct linkage in benefit to the entire community or a <br />disproportionate small segment of the community; and whether <br />key or core services were provided and rationale for <br />