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<br />Finance Officer Lund reviewed that not hiring budgeted positions reflects a savings, which is <br />itemized. She stated the hourly rate is billed back. She reviewed that the shortage is $993,000 <br />currently. She reviewed that additional permits pulled would decrease that amount. <br /> <br />Councilmember Cook asked what the plan is. <br /> <br />City Administrator Norman stated that a tax dollar shortage is pulled from reserved funds. He <br />reviewed that this is according to policy. <br /> <br />Finance Officer Lund reviewed that the shortfall is a conservative estimate, which has a cushion. <br /> <br />Mayor Gamec reviewed that the procedure is complicated. He stated that a monthly budget <br />review is important. He stated the department heads know what the cuts should be. He expressed <br />concern that the new municipal building may have unexpected costs which would impact the <br />budget. <br /> <br />Councilmember Strommen expressed support for reviewing the deficit before it increases. <br /> <br />Mayor Gamec commented that consulting fees are expensive but necessary. He commented that <br />some costs are triple their estimates. <br /> <br />City Administrator Norman stated that department by department there are costs that could be <br />looked at more closely. <br /> <br />Mayor Gamec reviewed that the needs of constituents are served by staff. He stated that at <br />National Night Out he heard a lot of positive comments. <br /> <br />Councilmember Strommen suggested that the budget deficit be watched to keep the City in good <br />standing for their bond rating. She commented that a good bond rating is important to the City. <br /> <br />City Administrator Norman stated that when the bond rating is renewed a review of reserves use <br />is noted. He stated it is important to keep on top of the budget and contain the deficit to reduce <br />the risk of using reserves. <br /> <br />City Administrator Norman reviewed the 2007 budget. He stated that requests from each <br />department have been noted. <br /> <br />Finance Officer Lund reviewed that the budget contains over a million dollars in capitol <br />equipment, and the deficit is noted. She reviewed the breakdown and stated that the Municipal <br />Center is included where last year these funds were transferred over. The budget value increased <br />to 16,039,000. She stated there has been a growth of four million. She stated the major budget <br />changes from last year are building permits, which are reduced by $600,000 from last year. <br />There is a change to 336 units versus 900 units last year. The homestead credit of $448,000 has <br /> <br />City Council Work Session I August 3,2006 <br />Page 6 of 8 <br />