Agenda - Council Work Session - 07/31/2007

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~ - CITY COUNCIL WORK SESSION Topic Report: 2008 General Fund Budget By: Diana Lund, Finance Officer Background: Staff and City Council held their first 2008 General Fund Budget discussion on July 10, 2007. The direction sought by staff at this meeting was at what level Council wished to see the tax capacity rate and whether there was a consensus of using the Capital Equipment Revolving Fund to purchase 2008 new Capital Equipment Purchases and to reduce the debt levy pertaining to the Municipal Center and 2004 and 2005 Capital Equipment Certificates. Every Councilmember was in the affirmative that they wanted the tax rate of 2008 to . remain the same as 2007, or even lower if possible. A comparison of the 2007 and 2008 levy is included on the attached detailed levy sheet. In weekly budget meetings, staffhas determined that there are several mechanisms that could be used in maintaining the 2007 tax capacity rate. Staff would like to discuss the following options: Use of Capital Equipment Funds Funding of Community Programs-policy use of Charitable Gambling Funds Departmental line items During the 2008 budget discussions, staff also prepared an amendment to the 2007 General Fund budget to reflect the stagnated building economy and its affect on the City's budget. Based on the City's current building trend, staffis foreseeing an approximately $650,000 shortfall in budgeted building permit revenue. The.l,007 budget amendment will be presented at the meeting. Due to the downturn in the building economy as mentioned, the City needs to not only address the current issues of2007 and 2008, but also into the immediate future. The Municipal Center debt is expected to double in 2009 from the current debt of approximately $750,000 to $1.5 million. The City's finance consultant, Paul Donna, will be present to discuss a debt restructuring of the Municipal Center for the periods of 2009- 2012 that will keep the debt constant at $750,000 for these years.