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Regular City Council Meeting Monday,June 13, 2011 Page 24 tions; and impacts to the City's operations, as well as the average homeowner of approximately$20 per year. Councilmember Johnson indicated that, from an operating side, those inflationary costs would project a proposed 3.4%levy increase for capital funding purposes. City Manager Malinen, from a staff perspective for the proposed recommenda- tions, noted that it would significantly change daily operations for the City, and the operating budget would need to be reduced accordingly to achieve it, but in the long run long-term capital needs could no longer be sustained. Mayor Roe noted that the subcommittee was cognizant of current economic times and current taxpayer burdens, and impacts of these recommendations, reiterating that to achieve this sustainable situation, it would increase costs for the average taxpayer by approximately$20 annually, starting in 2012; then would not increase every year, but the increase would stay in place over the twenty (20) years. By comparison, Mayor Roe noted that there was still the issue of the major capital improvements pending for the City's aging infrastructure: water, sanitary sewer, and storm sewer; and there would most likely be impacts on business owners and residents, depending on how the City moved forward. Mayor Roe noted the de- pendence on future City Councils to follow-through on these recommendations; however, the subcommittee was of a consensus that the bitter pill be taken in year one to address these significant capital needs and to balance the overall picture, as a main role for the City Council. Mayor Roe clarified that the Park Improvement Plan (PIP) fund was not considered at this time. Discussion included reviewing allocations and funding recommendations; retain- ing fluidity in the process to consider the fire station and parks & recommenda- tion capital needs; understanding the implementation picture for the Parks and Recreation Master Plan and any potential referendum, intentionally left out at this time; recognizing the need to maintain existing parks and recreation facilities; in- clusion of major facility maintenance (e.g. chiller at the skating center); pathway maintenance included in the twenty (20) year projections, as much as they were known, but reflecting fairly good estimates; and the intent of the subcommittee to provide the nuts and bolts as a functioning City government, while not including solutions to all the needs presented. Councilmember Pust thanked the subcommittee for their work and their clear ex- planation, and for her benefit,repeated the three recommendations: a. Cut spending by$300,000 and put into capital needs; b. Increase property taxes to raise another$500,000 and use it exclusively for capital needs, representing a 3.4% levy increase; and c. A one-time transfer from the General Fund into capital needs to endow a one-line item.