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MINUTES <br /> OF THE SPECIAL MEETING OF THE <br /> EDINA CITY COUNCIL HELD AT CITY HALL <br /> JUNE 20, 2006 <br /> 5:30 P.M. <br /> ROLLCALL Answering rollcall were Members Housh, Hulbert, Masica, Swenson and <br /> Mayor Hovland. <br /> Mayor Hovland said the purpose of the special work session was to review issues that <br /> will affect the preparation of the City's 2007 Operating Budget. <br /> Manager Hughes explained the 2006 legislature did not enact any significant changes to <br /> property tax laws. Therefore, the City's 2007 budget planning would not be affected by <br /> levy limits, property tax freezes, or any other provisions that would further restrict the <br /> Council's budget considerations. He added this also meant no corrections had been <br /> made to the law concerning Market Value Homestead Credit (MVHC) so the City must <br /> continue to include in its tax levy amounts necessary to offset this lost aid. Mr. Hughes <br /> also noted 2005 legislation increased the PERA employer contribution which has been <br /> estimated at approximately $90,000 for 2007. <br /> Mr. Hughes reviewed forecasts used in developing the 2007 scenarios, which included: <br /> Expenditures: <br /> • Wage and Employee Benefits - a three percent wage increase for our employees <br /> is included plus an additional lh% to account for employees who will go through <br /> salary steps in 2007 <br /> • Insurance Increases-Employee health insurance has an expected increase of <br /> sixteen percent for 2007. The forecast includes a $60 per month per employee <br /> increase toward employee insurance coverage <br /> • Contractual Services, Commodities - A three percent across the board increase in <br /> contractual services and commodities and a three percent increase in central <br /> service expenses were projected for 2007 <br /> • Budget Adjustments-Department Heads' proposed new programs/expenditures <br /> for 2007 <br /> Revenues: <br /> • Non-Tax Revenue - In past years, the City has followed a conservative approach <br /> in forecasting revenue from "non-tax" sources. Based upon past experience the <br /> City was projecting additional revenues from building permits, ambulance fees <br /> and investment earnings due to higher short term interest rates. The added <br /> revenue would reduce dependence upon property tax revenues to support the <br /> 2007 budget <br /> • Budget Reserves - Previously the Council discussed the possibility of applying <br /> some of the 2005 surplus to the 2007 budget. The bulk of the 2005 surplus was <br />