WS 2006 08 28
CHANHASSEN CITY COUNCIL
WORK SESSION
AUGUST 28, 2006
Mayor Furlong called the work session to order at 6:10 p.m.
COUNCIL MEMBERS PRESENT:
Mayor Furlong, Councilwoman Tjornhom, Councilman
Peterson and Councilman Lundquist
STAFF PRESENT:
Todd Gerhardt, Greg Sticha, and Paul Oehme
DISCUSSION OF PRELIMINARY 2007 BUDGET & LEVY.
Greg Sticha reviewed changes made since the last City Council meeting on this item. After
receiving new information from the County on housing starts, staff revised the numbers and
outlined 3 levy scenarios. One, using case reserves to bring a net effect of 0%. Two, not using
cash reserves but budget reductions that would bring a net effect of 0%. And three, following
last year's budget process using reductions in the debt service levy to bring a net effect to
property owners of -1.02%. Staff was recommending the City Council set the preliminary levy
at $9,575,778 using scenario 1 or 2. Todd Gerhardt explained that the health insurance numbers
came in at a 6.9% increase as opposed to 15% which was proposed earlier, resulting in a budget
reduction of $34,000. Mayor Furlong asked what percentage of employees went with the health
savings plan versus Blue Cross insurance. Greg Sticha stated he would investigate the matter.
Councilman Peterson asked staff to explain how the 5% number for salary increase was
determined. Councilwoman Tjornhom asked staff to talk about the numbers relating to the new
compensation plan instituted last year and capital replacement fund numbers. Councilman
Lundquist asked how the preliminary levy numbers compared with 2006 and what would need to
be done to get to last year's levy amount. Mayor Furlong felt the preliminary numbers proposed
by staff were reasonable and the City Council will review individual department numbers in the
coming months to find cuts. Councilman Lundquist asked why the levy couldn't be reduced by
the $34,000 savings in health insurance and $60,000 for a new police investigator. Todd
Gerhardt explained how new growth has to be taken into account in the levy numbers and would
recommend keeping the levy as proposed. Councilman Peterson asked staff for accurate
numbers for growth over the last 3 years, market value real growth numbers versus estimated
numbers.
Mayor Furlong adjourned the work session meeting at 6:50 p.m.
Submitted by Todd Gerhardt
City Manager
Prepared by Nann Opheim