Minutes - Council Work Session - 06/19/2012

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City Administrator Ulrich stated the Council needs to act on the one remaining staff layoff, the Fire Secretary position. He indicated if the Council agrees with this budget, it will come forward at the next Council meeting. Mayor Ramsey stated he wants to wait on the ED/HRA Manager and Engineering Tech III positions until better numbers are available. He stated part of his goal was to act on staff layoffs, which the Council is achieving. Mayor Ramsey stated he can live with this budget preliminarily until in September when the Council will set the preliminary budget. Councilmember Elvig noted the City has projects planned for this year that would generate revenue if administered in- house. He stated he would like to hear what the opportunity loss is if the Engineering Tech III is not hired. City Administrator Ulrich stated that is a good point because there are opportunities to generate revenue with the Sunwood Drive realignment and other projects. He indicated staff can prepare that analysis for Council discussion. Councilmember Elvig pointed out that several years ago, the City generated a tremendous amount of revenue from engineering and plan check fees. He stated if the City can generate another $250,000 on a $50,000 hire, it is worthwhile. Councilmember Elvig stated he would like to see that analysis. Councilmember Backous questioned the City's ability to make money "out of thin air" and stated he agrees with Councilmember McGlone that if it cost the City "x" number of dollars to do the work, that is what should be charged. Councilmember McGlone agreed and noted State Statute precludes cities from making money and it is only allowed to recoup costs. He did not think the City should be making money on those types of services. Councilmember Wise explained that the engineering work on a project has to be done whether hired out or in- house. If done in- house, a savings is realized that offsets staff costs. Councilmember Tossey raised the scenario that if a project cost $100 and engineering is paid $10, then why not charge the project $90. Councilmember Elvig explained there is burden and overhead costs (supervision, management, structure, office equipment) equaling 1.75 to 2.5 for any business that has to be covered. Councilmember Backous asked who is paying the burden. Councilmember Elvig stated the project is paying the burden and it is a good deal for the City to spread out that burden by taking on in -house operations. City Council Work Session / June 19, 2012 Page 12 of 15