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Councilmember Specht asked for clarification that if they move forward with the status quo budget <br />it would only be a 10.35% increase if they move forward with the capital equipment certificates. <br /> <br />Finance Director Lund explained that if they move forward with the status quo budget, remove the <br />plow trucks out of the tax levy, and add back the other items she discussed it would take the <br />increase from 10.35% to 12.67%. <br /> <br />Councilmember Specht asked what the tax capacity would be for this. <br /> <br />Finance Director Lund stated that it would be around 41%. <br /> <br />Acting Mayor Riley asked if this included the debt service payment for 2024 as well as taking out <br />the debt for 2025 and 2026 capital equipment but not buying anything yet. He asked how this debt <br />would be serviced. <br /> <br />Finance Director Lund clarified that they would not be taking the debt out for those years and it <br />would be additional on top of the existing numbers. She stated that if they also wanted to take out <br />debt for the 2025 and 2026 capital equipment it would add an additional $300,000. She explained <br />that it will be the same interest rate. <br /> <br />Councilmember Musgrove asked if the numbers for the 2024-2026 capital requests included <br />adding the plow trucks back in. <br /> <br />Finance Director Lund said no. <br /> <br />Councilmember Musgrove asked about the status quo budget with the capital equipment <br />certificates and the plow trucks versus without these items and asked about the yearly payment <br />difference. <br /> <br />City Administrator Hagen stated that they are currently at $3,200,000 annually for debt and if these <br />items were added it would increase by almost $200,000 and if they also added the 2025 and 2026 <br />capital equipment it would add another $300,000. <br /> <br />Acting Mayor Riley asked if there is an advantage to doing all three years of capital equipment at <br />once. <br /> <br />Finance Director Lund explained that the only disadvantage is that it always seems that there is <br />something new that comes up for capital requests. She stated that she presented the three years <br />because doing more than one year at a time so they do not have to continue to go out for debt <br />issuance. She noted that there is a possibility of interest rates coming down. <br /> <br />City Administrator Hagen stated that if they issue an equipment certificate, it is similar to road <br />bonding where it is specific for the items requested. <br /> <br />Acting Mayor Riley noted that Finance Director Lund shared that they did not need $500,000 for <br />pothole contracting next year. He asked City Engineer/Public Works Director Westby to explain. <br />City Council Work Session / July 25, 2023 <br />Page 4 of 11 <br /> <br />