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City Council Regular Meeting — 07/12/04 <br />DRAFT Minutes - Page 37 <br />Roll Call <br />Ayes: Schroeder, Maschka, Ihlan and Klausing. <br />Nays: Kough. <br />10. Overview of Proposed City Budget for 2005 and Review of <br />City Council's Budget Review Schedule <br />City Manager Beets provided a brief overview of the draft <br />budget presented to the City Council for their review, and his <br />cover memo outlining major components and considerations in <br />the proposed budget, along with his recommendations. Mr. <br />Beets noted that on the capital side of the budget, there was a$2 <br />Million reduction with the anticipated completion of the City <br />Hall construction project, and pay-as-you-go tax increment <br />financing certifications continuing to come down. <br />Mr. Beets cautioned that on the operating side of the budget, <br />significant issues remained, including addressing the $700,000 <br />reduction in state aid and his recommendations; the need for an <br />additional $300,000 in annual operating revenues to maintain <br />the same level of services based on inflation; and increases in <br />personnel costs (i.e., cost of living adjustments, salaries and <br />wages, and the City's portion of employee health care insurance <br />costs for 150 employees). <br />Mr. Beets summarized his perception of the three options <br />available to the Council, as outlined in his memo: to cut costs, <br />increase revenue, or continue to spend the City's savings. Mr. <br />Beets recommended that the City not continue to spend the <br />savings as a gap strategy in 2005, and encouraged the Council <br />to address the structural budget issue through a combination of <br />cost cutting and revenue increases. Mr. Beets overviewed his <br />recommendations, noting that with great reluctance, he was <br />recommending the elimination of five employee positions, two <br />through attrition, noting that personnel costs were the main <br />driver for the City's operating costs. <br />Mr. Beets noted that other proposed cuts are similarly <br />unpopular (i.e., cuts in park improvement program levy); as <br />well as increasing the levy by 4.9%, increasing franchise fees, <br />and initiating a street light utility fee. <br />Overview of <br />Proposed City <br />Budget for 2005 <br />and Review of <br />City Council's <br />Budget Review <br />Schedule <br />