11.03 - Sept 7, 2010 City Council Minutes

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City Council Minutes September 7, 2010 Page 6 of 13 -------------------- - - - - -- 6.5.A. Review of Revised Preliminary 2011 Budgets The Mayor noted that staff has made several budget cuts to the preliminary budgets, as requested by Council. She noted that the proposed cuts bring the tax levy from 10.69% to 4.70 %. The Clerk noted that there are several unknowns in setting this preliminary budget. She cautioned that the reduction in the police budget would more than likely include a cut in personnel. This reduction does not take into account the fact that the City may have to pay unemployment if an employee is laid off. She further noted that the School has not made a final decision in whether or not they want to continue with the police /school contract for this school year, 2010 -2011, or the following year - 2011 -2012. She also stated that there has been some discussion as to whether Jenkins Township will continue with their contract and further that Jenkins City has voted to reduce its portion of the contract from $51,650 to 30,000. The Clerk stated that If any one of these scenarios plays out, it will result in a larger increase to the tax levy. She cautioned that once this number is set as the preliminary levy, it cannot be increased. She suggested that the Council may want to submit a higher levy until these issues can be resolved. The City has until December 28th to certify the final tax levy. Mayor Adams noted that if the City loses all of the police contracts, the budget will realize a negative $109,000. She stated that she does not want to set preliminary levy too low. The Mayor suggested setting the preliminary tax levy at a 10.69% increase with the intention of forming a committee of two Council Members and staff to review the budget and propose budget cuts to the Council in October with the intention of lowering the levy. She indicated that by this time, the City will have more information regarding health insurance costs and police contracts. MAYOR ADAMS MOVED TO CERTIFY THE PRELIMINARY TAX LEVY AT $1,619,000 WHICH IS A 10.69% INCREASE AND TO FORM A COMMITTEE OF THE MAYOR AND ONE OTHER COUNCILMEMBER TO WORK ON THE BUDGET WITH STAFF WITH THE INTENT OF REDUCING THE LEVY AMOUNT TO NO MORE THAN A 3% INCREASE PRIOR TO SETTING THE FINAL LEVY IN DECEMBER. COUNCIL MEMBER NAGEL SECONDED THE MOTION. Council Member Malecha stated that she concurs that the City should set the preliminary levy high at least until some of the unknowns are worked out and with the intention of lowering this number to at least 3 %.