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City Coundl Page 2 of 4 <br />April21, 2003 <br /> <br />the 2003 adjustment without impacting many employees and services or programs but the <br />situation in 2004 is still vegy much unknown until the State Legislature makes a <br />determination on levy limits and the amount of cuts in state aids. <br /> <br />.~eserve$ <br />I will be recommending to the City Council the use of some reserves to balance the <br />2003 budget and to address the 2004 shortage. The "working" number for 2003 has <br />been about one-third (or $215,000) of the anticipated reduction. Hopefully the final <br />amount will be much lower. Approximately one-half of the reserves to be used in <br />2003 could come from the liquor store and the other one-half could come from the <br />fund balance in the general fund. The city must be careful in its use of reserves as <br />they are limited and as the use of reserves needs to be replaced with reoccurring <br />revenues in future years. At this time the only known source of additional general <br />fund revenues is taxes. <br /> <br />Fee Based Revenues <br />When a budget challenge such as what we are experiencing surfaces, it requires <br />everyone to closely evaluate the fees that are being charged for the services that are <br />being provided. In this regard, some of the recreation fees have been adjusted <br />(increased slightly) to help cover the expenses for providing the programs. <br />Additionally, based on information in a state required report on building and <br />planning expenses and revenues, it has become much more apparent that the city has <br />been subsidizing the planning process. In this regard the City Council will soon see a <br />request to amend the city fee resolution to increase some of the charges for planning <br />applications so that they come closer to covering the publication expenses and staff <br />time involved in reviewing and processing the requests. <br /> <br />Cuts/Reductions in Services and Pro_grams <br />No significant impact to city services and programs are anticipated in 2003. There <br />will be some reductions and delayed maintenance but the impact should not be <br />dramatic. For example, the cycle for mowing parks may get a day or two longer; it <br />may take an extra hour or two to plow snow; it will take longer to get to the plowing <br />of the sidewalks and ice rinks; snow in the downtown may not be hauled away until a <br />day later; the sealcoatmg and overlay street maintenance program may be downsized; <br />etc. At this time it looks like the capital outlay program will be similar to past years <br />provided that equipment certificates remain outside of the levy limits. The city will <br />also continue to use its equipment reserves for some capital purchases. <br /> <br />Emplo yees <br />Ways to save money within the personal services category, provided it doesn't <br />significantly impact city programs or services, include not filling some vacancies <br />when they occur, consider contracts for services, and reduce part-time hours. For <br />example, the assistant cable TV producer position is not being filled; a police officer <br />position may remain vacant for awhile; the fzre chief is not planning to add additional <br />firefighters until everyone sees how the new station operates; the street department <br />assigned an employee to building maintenance (as we did not replace Sue Herrboldt <br />when she left) and the building custodial position was reduced to one-half time <br />because the city contracted out for building cleaning services; fewer summer park <br /> <br />COUNCIL\Pat\update. doc <br /> <br /> <br />