City Council Minutes 2018 10 04 - Laserfiche WebLink

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City Council Meeting Minutes October 4, 2018 Page 2 of TO Finance Director Watson reviewed some questions from the meeting earlier this week and some budget terms related to assumptions and targets. Mayor Pro Tem Lipton stated the term target is not specific enough to set limits on the spending. Councilmember Maloney stated he would prefer the term limit or cap. Mayor Pro Tem Lipton would prefer both revenue and expenditures be "assumptions." Councilmember Maloney would like the target for wage growth lowered to 3%. Director Watson stated the percentage increase includes merit raises, market adjustments, and new Full Time Equivalents (FTEs) and variable hours. Mayor Pro Tem Lipton stated 5% increases indefinitely is not realistic and doesn't meet our revenue stream. He would like some limit set on what the manager can have available for the next five years. Councilmember Loo asked where the 5% comes from. Director Hix stated the numbers are from the Employers' Council which gives information from across the state with an average wage increase at 3.1% forgovernment in the Denver -Boulder region. Councilmember Stolzmann confirmed the 5% includes new employees and market increases, not just the increase in wages. City Manager Balser noted bringing Boulder into our market pool did raise our costs. Director Hix noted we also compete with Boulder for employees so that is one reason. City Manager Balser noted staff will always make the budget balance and the reserve balance is significant. Mayor Pro Tem Lipton asked how much the out year deficits are. Director Watson noted it ranged from $1-3M for those out years. He noted this is a measure to make sure recurring expenses are not being paid by one-tim.e revenue. It is the structural difference. Mayor Pro Tem Lipton said we are over leveraging on the expenditures and that is caused in part from the 2019-2020 decisions. We need a 5-year balanced budget. MOTION: Councilmember Maloney moved we adopt a principle of having a balanced structural budget for six year planning. Councilmember Loo seconded. Mayor Muckle stated he wouldn't support this motion even though he likes the principle, but the General Fund is never just made up of simply consistent recurring expenses and revenues and that is why we don't want to build a budget based o,n one-time revenues. When a plan is made when you don't know what will happen in out years you are doing a disservice to the residents. By truing it up every two years you have much better information. If this is done, there could be money in the bank that could be being used. Councilmember Stolzmann stated one-time revenue should support one-time expenses. She supports the motion. We can't, put positions in place that count on one-time revenue.