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City Council <br />Meeting Minutes <br />July 21, 2022 <br />Page 3 of 5 <br />Finance Director Kevin Watson reviewed the expenditure targets, the percentages <br />being targeted at this point in the budget process, and the anticipated trends. <br />Members asked questions related to compensation expectations. Acting City Manager <br />Davis noted the volatile employment market and stated these numbers are very likely to <br />change in the course of the budget preparation. <br />Members noted the need to keep wages competitive to keep staff and discussed how <br />those costs might require service reductions to keep the budget balanced. <br />Councilmembers agreed there may be tough choices about services levels in this <br />budget. <br />Members made no changes to the assumptions at this time. <br />Mayor Stolzmann noted that there are far more capital projects requested than the City <br />can pay for. Acting City Manager noted there were even more requests did not get on to <br />this list. These issues will be addressed in upcoming budget iterations. <br />Public Comments <br />Cathern Smith, stated she was concerned to learn that the budget includes assumptions <br />related to future development, particularly Redtail, which may or may not happen. <br />Finance Director Kevin Watson reviewed fund forecasts including the 2022 actual <br />balances, capital improvement projects, and assumptions. These forecasts are required <br />in the budget process per policy. He noted there are implications to the forecasts from <br />the fire, inflation, and possible development. <br />He noted staff is proposing to maintain the current turnback methodology. He further <br />reviewed the inter -fund transfers that are typically done based on the City's financial <br />policies. <br />Mayor Pro Tern Maloney asked if those transfers are mandatory or if they are <br />discretionary. Finance Director Kevin Watson stated they are not mandatory. Mayor <br />Stolzmann also noted the Council can amend the policy related to transfers if they are <br />interested in doing so. <br />Director Watson reviewed the general assumptions related to the Marshall Fire. At this <br />time staff is assuming all city-wide supply and service costs related to the fire will be <br />reimbursed by FEMA; and the lost revenue from property tax will be reimbursed by <br />insurance, wages will be reimbursed by FEMA. The estimated cost to the City for PPDR <br />has been lowered to $3M. And, staff is expecting $1 M from FEMA for infrastructure <br />repairs. <br />