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Mayor Strommen stated the City cannot take advantage of that because it is dictated by what had been levied last year. Councilmember Tossey stated he wants money to go towards roads but he does not support franchise fees. Mayor Strommen stated Ramsey does not get the choice to use the additional revenue generated by decertification of TIF #2 for road construction due to levy limits. Finance Director Lund stated another reason levies were put in place is that the state passed a sales tax exemption. Councilmember Riley stated on the transparency issue, several years ago the EDA/HRA were the same and it was past practice to use one levy one year and the other levy the next year depending on which was the most advantageous. He stated he did not support that practice. Councilmember Riley stated this budget starts with the Strategic Plan and to make changes that can be paid for. He stated the "wish list" needs to be scrutinized first and only items included that can be paid for. Mayor Strommen stated the personnel changes considered during strategic planning are not enough to offset road costs so that problem still needs to be addressed. Councilmember Kuzma stated in 2014, $156,000 needs to be cut even if the levy limit is maximized. He stated if the $156,000 is cut, the budget would have $500,000 allocated for roads so maybe only maintenance can be done in 2014 unless information is presented at the next Work Session to resolve that funding issue. Councilmember Riley stated there is an operating budget and a road funding issue but right now, the $156,000 needs to be cut first and then the Council can tackle the road funding issue. He noted that the City cannot increase taxes to pay for road reconstruction, which frames the Council's discussion. Mayor Strommen agreed and stated the Council has wrestled with this decision for years and keeps pushing it "down the road" but that decision is needed now because there is a big issue with roads. She stated she is not concerned about cutting $156,000 from the 2014 budget but funding road reconstruction will be a difficult decision. She stated at some point, a Council has to tackle that issue and find funding that is not one-time in nature, perhaps through a phased approach. City Administrator Ulrich asked if the non -union wage discussion should be referred to the Personnel Committee. The City Council agreed it should be referred to the Personnel Committee Human Resources Manager Lasher explained it was a COLA increase on top of the entire scale. City Council Work Session / July 23, 2013 Page 4 of 7