Minutes - Council Work Session - 03/20/2012

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Mayor Ramsey pointed out that assessments have been part of Ramsey culture since it became a City and that is the reason for the Charter and counter petition process. He indicated he is willing to support 50% road assessment. The current policy is 100% and 50% for overlays. Mayor Ramsey stated if there is a 50% assessment for roads, he thinks the Council could figure out how to get overlays funded as part of the budget. He did not think it was realistic to get all road projects covered without assessment or increased taxation, but that may change in the future as the City grows. Councilmember Elvig stated the target for budget reductions started at $500,000 then the Council discussed also funding road construction, now it is considering a "30/40/50" formula. He asked if there will be another "goal" discussed at the next meeting. Councilmember Elvig suggested the Council zero in on what it wants to accomplish. He did not believe funding $3 million a year for road construction was a reasonable goal and would over burden residents. Even if $1.5 million, he asked how the City would raise those funds, noting it has to come out of the citizen's pockets at some point in time. Councilmember Elvig noted it was very unpopular when the City set up a Utility Fund to address storm sewer but now it makes sense. Now the Council is starting to look at this dilemma with road construction. Some don't like the assessment approach so a survey was done and residents seemed supportive of a franchise fee, thinking it made the most sense. Councilmember Elvig stated he has never been in favor of a franchise fee but the City has to raise extra money for the roads and a franchise fee would be over a greater area than taxes. He indicated he does not want to consider a franchise fee without reducing the budget considerably so residents can be shown their taxes have been reduced and they can see the difference. Councilmember Elvig expressed concern with putting too much pressure on the City's organization and supported reductions in "bite sizes," trying to match the down scaling of the economy. He stated the Council needs to determine the amount of funds that need to be raised each year and whether that amount should be raised through taxes or taxes with a franchise fee. Mayor Ramsey stated he took the 40% from what was needed in tax capacity, 30% of the budget for roads, and felt 50% made sense for personnel, thinking the City could be there by 2016 when, hopefully, valuations will be up and more money will be realized. Councilmember Elvig stated if the City is trying to raise $3 million a year for roads, 30% would equate to a $9 million budget. He asked whether $1.5 million could be raised in franchise fees. Councilmember Strommen stated while she understands the attempt to create a simple formula would ask what is the cost of the road projects and how much does the City have to fund. On the suggestion to have 50% of the budget spent on personnel, she asked what level of service the Council wants to provide. Councilmember Strommen stated it is easier to define the level the Council wants to provide and then determine the minimum funds needed to get to that level instead of identifying a percentage. That method also identifies when you are at the breaking point of decreasing service and need to look at the budget. Councilmember Strommen noted the City had equipment breakdown during the last snow plow because there was no slack in the system, resulting in decrease in service and no mail delivery that day. She stated the Council wants the City to be efficient but some cushion is needed so it does not affect services. City Council Work Session / March 20, 2012 Page 5 of 12