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Finance Director Lund presented the Capital Equipment and Outlay budget line items and <br />explained the option of using equipment certificate to fund 50% of equipment costs. <br />Councilmember Riley asked if the option of fixing equipment had been considered. <br />Finance Director Lund answered in the affirmative and stated staff reviewed each item, line by <br />line, to determine if repairs could be made or the purchase pushed out to a future year. <br />City Administrator Ulrich stated the City's mechanic is good at making recommendations <br />whether it is prudent to make the repair or purchase new. <br />Finance Director Lund stated the increases include $140,000 for Police Department camera <br />equipment, a plow truck, and funding for the new radio equipment, all being large ticket items. <br />She requested Council direction on funding for Roads and Capital Equipment. She stated other <br />cities are levying 3% but those cities have franchise fees and Local Government Aid that'is over <br />$1 million. <br />City Administrator Ulrich asked for Council input on the level for the tax capacity rate, levy <br />amount, and whether to use one -time funding to lower the overall levy. <br />Mayor Strommen stated her appreciation for staff's work to reduce the budget as directed by the <br />Council. <br />Councilmember Riley stated he thinks the budgeted road funding (one -time funds) should be <br />expended for roads and the level of the bonds reduced by that amount. He asked whether the <br />City should use all of the HRA fund balance as there may be some on -going costs that need to be <br />covered. <br />Finance Director Lund pointed out that staff costs will remain after the HRA is dissolved. <br />Councilmember Riley supported the formula suggested by staff to fund equipment purchased <br />with 50% from the Equipment Fund and 50% from Equipment Certificates. <br />Councilmember LeTourneau asked if he is suggesting using possible offsets. <br />Councilmember Riley supported using the Road Fund balance as that was the purpose for <br />budgeting that amount. <br />Councilmember LeTourneau asked why the Council would not want to use those funds. <br />Finance Director Lund stated Council's first direction was to get the tax rate below the tax rate of <br />last year. Since this is one -time money, it was not considered in those reductions. She clarified <br />that the tax rate is an estimate. <br />Mayor Strommen asked about the possibility of using that balance to accelerate road projects. <br />City Council Work Session / August 11, 2014 <br />Page 4 of 9 <br />