Budget Work Session Update

We discussed the budget last night. Some of the key points that need to be highlighted -

Three year time horizon for draw down of fund reserves. This means I anticipate having to use our ample fund reserves as a revenue source to balance our budget the next three years.

A 3% budget cut for 2010. This is on top of the cuts we already made this year.

Nearly a 19% hike in insurance rates. Still exploring other options but this is today's reality.

0% pay increase to non-union and union employees. This has to be negotiated with our Unions as contract talks will begin in the next few months. The simple choice is hold the line on pay or lose employees. We have cut over 10% of city staff the last few years already. My hope is maintaining our service level in partnership with our employees.

Future slashes in LGA and the need for the City to remove all LGA as a source of revenue in our operating budgets. The State's budget crisis will only get worse and they will continue to not live up to their promises. We must forget the State as a budget partner. We will lose roughly half a million dollars from 2008 to 2010 in LGA - our total budget is roughly $3.3 million.

Continued slide in permit fees

Unpaid assessments - mainly foreclosed developer properties east of highway 65. The major ones have foreclosed except Woodland Development which is current on all obligations.

Unpaid taxes which again is a drain on our ability to maintain services.

No tax increase. This is doubly important as we see the School district looking for a dramatic Levy increase and no indication what the county intends to do with their property tax responsibilities. The City of Isanti will not raise taxes.

We have been cutting spending each year I have been Mayor and building fund reserves in preparation for these difficult times. We better positioned than the vast majority of cities in our state. The fund reserves we have are one time money and can not be looked at to cover continued cost indefinitely. Once it is spent it is gone. There will be some that will urge spending these funds to increase wages or pay for pet projects. This will leads us back to the ruinous spend of years past.

As the nation, state and county economies return to a "normal" situation next year or the year or even the year after that we will be well prepared to move forward.

* Our City Attorney has already agreed to a 0% increase to his lower than normal rates *