2015.10.13 WS Minutes - Laserfiche WebLink

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Schlichting indicated staff was proposing to raise the franchise fees from 1.5% to 3% for electric users and 2% to 3% for gas users. He reported that Xcel was agreeable to the proposed increases. He commented that if approved by the Council, the rate increases would not go into effect until February or March of 2016. Councilmember Burg indicated she has spoken to a number of people regarding this matter and has found that the majority supported a tax levy increase. However, once it was explained that the franchise fees spread taxation out over a more broad number of users, she found that there was more support for the proposed franchise fee increases. She believed that the franchise fee was a more practical way for the City to raise revenue rather than placing the entire burden on homeowners. Councilmember Strub supported the per therm/kilowatt rate versus the flat fee. Further discussion ensued regarding the original tax levy that was brought to the Council by staff. Councilmember Bauman did not support a 9.63% tax levy increase. She believed that staff and the Council should be looking at cuts. She feared that the increased franchise fee was a slight of hand. Mayor Jacobsen questioned where the Council could make cuts while still maintaining the same level of City services. Councilmember Burg believed that in order to maintain the level of services that the City offered, increases would be necessary. She supported spreading the expenses across the board versus just being placed on property owners. Lotter provided comment on how health insurance expenses were on the rise and explained how this was impacting the budget. Further discussion ensued regarding City employee premiums. Councilmember Bauman was in favor of employees paying a little more for health insurance considering they were receiving a COLA bump given the fact the rates were quite low when compared to the private sector. She found it difficult to support low premiums for employees when additional taxpayer money was needed to cover City employee expenses. Mayor Jacobsen discussed how the nation was being impacted by the health care crisis. Lotter explained that if the Council was in favor of reducing the budget further, additional cuts would have to be made. Councilmember Jacobsen discussed potential budget cuts in order to get the levy reduced to 3.86% Councilmember Burg was not in favor of reducing the funding to fleet/non-fleet as this would not be a good practice to carry going forward into the future. Mayor Jacobsen wanted to see additional cuts made to the budget in order for the Council to reach a 2% increase in the levy. Councilmember Strub stated he would rather cut the golf course contribution than to make cuts to the City employee health care contributions. He valued the investment that the City made in its employees.