Minutes - Council Work Session - 11/21/2006

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value was overstated. Ms. Lund distributed scenarios reflecting the City's taxable market value with a tax capacity rate of 41.88%,40.23% and 39.87% for Council consideration. Mayor Gamec expressed an interest in the Communications Specialist position remaining in the budget. Councilmembers Olson and Pearson concurred. Councilmember Strommen expressed concern with reducing the capital equipment debt service in the first year as an option to reducing the tax capacity rate, as this would be a one-year fix that would push the debt off to later years. Councilmember Jeffery concurred. Councilmember Strommen noted the need to consider the effect additional staff positions will have on budgets in future years. Councilmember Elvig concurred. He stated in the last two to three years the Council has discussed the need for growth to keep up to what is happening in the City with infrastructure and services. He noted the need to consider downsizing while going through the current down cycle. He stated taxes should not be increased the same year a municipal center is built. It is time to tighten the belt and see if there are other ways to reduce the budget. He stressed the impact adding employees will have on this budget and future budgets. He asked what the other areas of increase are in the budget. Finance Officer Lund indicated the largest budget impact is due to increases in personnel; capital outlay increased slightly. Department heads provided an overview of the proposed duties of each personnel service request included in the 2007 budget and the impact to the General Fund. It was noted that the current Environmental Specialist position is funded from the Landfill Tipping Fund. The Assistant City Engineer position would have billable time, resulting in a net effect of $44,769.69 on the General Fund. The Utilities Maintenance Worker position would be funded through the Enterprise Fund and would have no impact to the General Fund. There was extensive discussion of the personnel service requests for the 2007 budget. It was also noted 2007 will be a transition year with staff in relation to City Administrator Norman's resignation. Consensus of the Council was to direct staff to provide Council with a recommendation at the November 28, 2006 work session on cuts in the budget that would keep the tax capacity rate at 39.8% without a reduction in the 2007 capital equipment debt service. Councilmember Elvig stated it should be kept in perspective that everyone else in the community and country are cutting back, yet the City is saying they should grow. There comes a point in time to at least grow at a slower pace; the City does not have the impetus and the housing at this City Council Work Session / November 21, 2006 Page 2 of9