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September 10, 2013 Councilmember Bauman commented the City received $493,000 in Local Government Aid (LGA) this year, which has not been received in years. These funds were granted by the State to assist municipalities in reducing property taxes. She recommended the Council adopt a Resolution reducing the levy by $493,000, which would assure this reduction was passed along to the residents dollar for dollar. Motion by Councilmember Bauman, seconded by Mayor Jacobsen to approve an amended tax levy for taxes payable in 2014 reducing the levy by $493,000 due to the Local Government Aid funding. Councilmember Burg stated the Council has been reviewing the budget for several weeks and she understood - additional conversations ccu4deeld to address additional reductions. However, she recommendedthe - preliminary tax levy be approved this evening and that the Council continue to work to make additional cuts. Councilmember Bauman indicated staff did not make the requested Council reductions, but rather took transfers from one fund to another, due to sales tax law changes. There were no adjustments or reductions made to the 2014 budget. She was in favor of passing along the LGA funds to the residents to assist in reducing property taxes. Councilmember Samuelson reiterated that this evening the Council was only approving the preliminary tax levy. She indicated fuuther cuts could be made after this evenings meeting. Mayor Jacobsen discussed the intention of LGA funds noting property tax reduction was its main purpose. He wanted the Council and staffto be held accountable on this issue. He questioned if it was possible to reduce the budget by another $225,000. Finance Director Maiers stated this would be possible, but he could not speculate how an additional $225,000 could be reduced from the budget He anticipated that cuts to services would have to be made in order to reach this goal. Councilmember Bauman explained local governments were being watched closely and she wanted the Council to be good stewards of the finances and services available to New Brighton residents. Councilmember Burg commented the City has been responsible with its spending and still had time to evaluate the budget prior to December. She recommended the proposed levy of 4.2% be approved this evening. Councilmember Bauman explained that a 2.6% levy reduction was needed to meet her objectives. She did not feel that any core services would need to be cut. She wanted to see the LGA funds be passed along to the residents for property tax relief, as was its original intention. She did not want to see the City spend the LGA funds in 2014, as they may not be available in 2015. Councilmember Jacobsen was tom on the issue. He agreed the LGA funds should be passed along to the residents for property tax relief. He cautioned the Council from setting a tax levy that was too low and would not meet the needs of the City in 2014. Mayor Jacobsen inquired if the City had not received $493,000 in LGA this year, what would the 2014 budget have looked like. He did not believe that City services would have been cut. He recommended staff review the budget further to make additional reductions. Councilmember Burg thought the City had a sound budget in place for 2014 and there was a reduction in expenses. She again recommended that the preliminary levy be approved this evening and that the Council continue to work with staffto work to find further reductions in the coming months. Mayor Jacobsen was in favor of cutting the 2014 levy an additional 2% as the long -team financial plan of the City was working. City Manager Lotter commented both the Council and staff have been working hard on the 2014 budget He discussed the positive financial decisions that have been made by the Council that have led to reducing the City's debt by 15% in the last few years. He was pleased with the financial position the City was in at this time. He offered a compromise that an additional $417,200 be taken out of the budget at this time to reach Councilmember Bauman's objectives. Councilmember Bauman supported the Council reducing the budget by $417,200 while advising staffto reduce the budget by another $63,000 by December. Councilmember Burg thanked the Council for the healthy discussion this evening. Page 4 of 6