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<br />Auditor stating that their fund balance is too high, so staff is presenting this option to keep the rate <br />constarit while keeping funds available and the tax capacity rate close to the 2007 rate. <br /> <br />Finance Officer Lund reviewed the capital items included in the proposed budget. She noted the big <br />ticket item is the plow truck. <br /> <br />Public Works Director Olson stated there has not been an additional plow route added since 1992 while <br />mileage continues to rise every year. Plow routes are getting to the point of taking close to ten hours to <br />complete a normal snowfall event. There are currently eight plow routes, and increasing this to nine <br />would lower the route time to eight hours. <br /> <br />Councilmember Jeffrey asked if the additional route will reduce the number of hours overall, with staff <br />hours being a wash. <br /> <br />Public Works Director Olson replied there will be less overtime, but in the budget they have included a <br />line item for a new utility maintenance worker that can also help with snowplowing. <br /> <br />Finance Officer Lund reviewed the following personnel positions included in the proposed budget: <br />· FT patrol officer: This position keeps the City on its status quo for police service <br />· Recreation coordinator: It was Council direction a couple of years ago to add a recreation <br />coordinator position with the discussion that there may be a recreation program in place. The <br />position is included in the budget for discussion. <br />· Maintenance worker; FT and ~ time utility billing clerks: These positions are enterprise funded. <br />Discussion is needed regarding whether utility billing will be brought in-house. <br />· Management intern increase in hours. <br /> <br />Finance Officer Lund indicated the cost of personal service has increased by $500,000 in the 2008 <br />budget in comparison to the 2007 budget. This includes a 3% cost of living increase, the 4% increase <br />between position steps, the PERA increase, and health insurance cost increases. <br /> <br />Interim City Administrator Nelson stated the City will be going out for bid this year for health insurance <br />and should have those numbers by early November. The increase in health insurance costs was 3% last <br />year. <br /> <br />Finance Officer Lund indicated direction is needed on whether Council is comfortable with an interfund <br />transfer in the amount of $1,033,000 from the Equipment Replacement Fund. The fund balance is <br />currently approximately $4.5 million. This transfer would leave a balance of approximately $3.4 million <br />in the Equipment Replacement Fund. <br /> <br />Interim City Administrator Nelson stated it is important to note that the likelihood of not having the <br />same issues in 2009 is slim. There is a need to think more in five to ten year increments than just <br />solving 2008, which is why staff would like to address the restructuring of the bonds for four years. <br />They need to think about the impact on the Equipment Replacement Fund on an annual basis and need <br />to think long term about these decisions. <br /> <br />Finance Officer Lund advised the debt restructuring would keep the municipal payment at $750,000 for <br />the next four years, rather than the $1.5 million. She requested direction on the tax capacity rate of <br />39.96% as included in the proposed budget. <br /> <br />City Council Work Session / July 10,2007 <br />Page 3 of 6 <br />