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City Council Minutes May 5, 2020 Page 15 of 19 ----------------------------- Ms. Malecha stated the 2021 Preliminary Budget discussion is something that was tabled at the April 7t" City Council meeting. Ms. Malecha reiterated what was presented at the April meeting and stated every year she requests direction from the Council before compiling the budget as to what the Council wants the City Staff to strive for. She stated that she listed in the memo some of the capital improvement plan items that will be considered during the 2021 budget process. Ms. Malecha stated that as in the past she is asking the Council to continue to focus their directive on the City's tax rate versus the levy as history is showing continual increases in the City's net tax capacity while maintaining a stable tax rate. She stated before discussion can occur at the Council level she needs a motion removing the agenda item from the table. COUNCIL MEMBER SWANSON MOVED TO REMOVE THE 2021 PRELIMINAY BUDGET DISCUSSION FROM THE TABLE. COUNCIL MEMBER SEILS SECONDED THE MOTION. MOTION CARRIED 5-0. Council Member Pederson s budget this year is going to be an unbelievable hard task because everybody that pays taxes in our town is hurting and we do not know what is going to happen. He stated that he does not really know how to approach looking at a 2021 budget other than looking at what the business news people are saying and he would like to see the City's budget target reducing 12 to 15% of what it was last year which would maybe be a 4 to 5% reduction in our tax rate, which would give tax relief for businesses and homeowners. He said that it is going to take a lot doing in order to get that done as far as tightening the belt everywhere, cutting expenses, eliminate things like capital expenses because we do not know what the future is. He stated that if we plan like it is going to be just like last year and that everything is going to be fine and it isn't the City is going to be hurting. He said he would rather plan for a recovery type budget to be sitting in a better position. Nancy Malecha put some cost numbers to the percentages that Council Member Pederson talked about. She stated that if they wanted to target a 12% to 15% reduction for the 2021 budget, they would have to reduce a range from $214,000 to $268,000 and if they wanted to reduce the tax rate for 4% to 5% that would be dollars in the range of about $99,000 to $129,000. She stated that she just wanted them to be aware what kind of dollar amounts being talked about with those percentages. Council Member Pederson stated that he is looking at a $100,000-250,000 reduction in the budget. He recommends that staff goes through the budget first and reduce wherever you can. He said it is like operating a business that you just lost a third of your business and you cut expenses. He believes this is a healthy way to look at what the City is up against because we do not know what is coming down the road and purchasing stuff right now makes no sense at all to him. Council Member Akerson agreed and stated that it is hard to know what to determine without knowing all the variables. He said it does not make sense to spend money.