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MINUTES/COMMITTEE OF THE WHOLE
Tuesday, August 25, 1998 - 7:00 p.m.

The city council met as the Committee of the Whole on Tuesday, August 25, 1998 at 7:00 p.m. in the council chambers with Mayor Owens presiding. Members present: Council Members Brooks, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner - 12; absent: Council Members Polovitz, Martinson - 2.

1. Matter of proposed 1999 budget for the City of Grand Forks.
John Schmisek, city auditor, reported that the guiding principals as set by the Mayor and based on information from the Budget Framework Committee were simple: to continue to provide basic city services, not to increase the mill levy, to try to hold utility rate increases to those proposed in the six-year plan prior to the flood, to try to protect against excessive future mill levy or utility rate increases, and to leave reserves for handling possible questioned costs. He stated that possible questioned costs are as they go through audits two/three years from now in CDBG funds and use of FEMA funds, it is very possible, that the Federal Government will say some are questioned costs and need to repay some money, may be fact of life that will happen, so need to protect ourselves against that. He reported that the tax consequences the mill levy is going to remain at 137.27 mills, benefit receive is that the value of one mill in 1999 is approx. $70,400 compared to $66,000 last year. He stated that in 1998 they had to make some reductions due to the flood and that was half percent decrease from the prior year, with the 6.6% increase they have projected in valuation this year, does bring us up to pre-flood value was last year. He stated with the real estate tax generated by this within the 1999 budget is $9.7 million which is about 17% of the operation budget when exclude CDBG funds that are in the special revenue funds. He stated that the general fund portion of the real estate tax is $5.7 million compared to $5.4 million last year or about 32% of the general fund.

Mr. Schmisek reviewed the 1999 preliminary annual budget in the amount of $204,336,488 and reviewed changes between the 1999 budget as compared to the 1998 budget. He reported that the mill rate would remain at 137.27 mills, however there would be an increase in estimated revenue of $601,105.

Mr. Schmisek reported that there are no new full-time positions in the budget, there were several requests for full-time positions and consensus was in reviewing dollar amounts available on the revenue side and know several were one-time revenues, a lot of those requests were moved into temporary position area to try to get handle on what’s going to happen this year and into next year. He stated they fell they will still have to buy two-years worth of time to let things settle down and know where going as a community. He reported that the pay increase steps and longevity amounted to $466,000 in the general fund. He reported that fringe increase of $391,000 is primarily pension but also involves
MINUTES/COMMITTEE OF THE WHOLE
AUGUST 25, 1998

disability and social security.
Mr. Schmisek reported there would be an increase in rates in several of the utility departments: Sanitation Department, no rate increase anticipated; Wastewater Department, 5% rate increase; Waterworks Department, 15% rate increase, and Stormwater Fund, rate increase of 8%, with an average monthly utility rate increase of 8.6%.

Mr. Schmisek concluded that the 1999 budget would have no mill levy increase, utility increases as anticipate din the six-year plan submitted pre-flood, small increase in expenditures to provide basic services, and reserves left to protect against excessive future mill levy/rate increase or provide amounts for handling possible questioned costs; and thanked those who worked to make presentation this evening. He reported that the next steps would be for preliminary adoption of the budget on September 8, and final adoption of the budget on September 21. It was noted that once the preliminary budget has been adopted it cannot be increased, can be decreased.

There was a general question/answer process relating to various budgeted items:

There was some discussion relative to budgeting funds for historic Preservation of $25,000, that if do this would it be on a continuing basis. Lonnie Winrich reported that funding is provided under the City Code, that Historic Commission is involved in many agreements with FEMA, Hud and expediting operation of those agreements, and it was noted that this is no permanent commitment, if no work to do, don’t fund it.



Upon call for the question on the amendment to decrease the mill levy by 3 mills, and upon voice vote, the motion was defeated.

Upon call for the question on the motion, and upon voice vote, the motion carried 11 votes affirmative; Council Member Glassheim voted against the motion.

ADJOURN

It was moved by Council Members Hafner and Lunak to adjourn. Carried 12 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor

Dated: 8/26/98.