August 18, 2011 A special meeting of the City of Jackson Finance Committee was held in City Hall at 4:25

P.M. on August 18, 2011, with the following persons in attendance: Finance Committee members Fred Bern and Dennis Hunwardsen, City Administrator Pat Christopherson, and Council Secretary Steve Walker. (A quorum of the Finance Committee was present.) The City Administrator first informed the Finance Committee of the EDAs plans to use its reserve funds to build a twin spec home in Sunset View for the purpose of hopefully sparking new home construction within Jackson. Finance Committee members then reviewed, as presented, projected municipal revenues, expenses, capital improvement requests, and funding considerations for the 2012 year. Brief discussion was had as to the Citys plan to share shop space with Jackson County. It was noted that Finance Committee members Bern and Hunwardsen are also members of the building committee who has been studying this matter. HUNWARDSEN/BERN moved and it was unanimously carried to offer the Finance Committees support of having the street and electric departments share shop space with the County. The City Administrator advised that every item department heads have requested for 2012 has been included in the budget. It was reported that the City is under expenses for 2011 by $191,000. Referencing the General Fund, the operational budget, Administrator Christopherson noted that this Fund for 2012 will remain the same as it was for last year, that being $868,000. However, he added, the general levy increase will be higher for next year primarily because the City will be making full G. O. bond payments for its Sunset View I and II Projects. It was reported that last year, the City made bond payments of $74,112.50 for Sunset View, Phase I. For 2012, these payments will amount to $94,570 (principal & interest). In 2011, the first year of bond payments for Sunset View, Phase II, the City paid $14,757. The Phase II bonds have been refinanced, and now the City will need to make payments of $71,167 in 2012. Also, bond payments for the River Restoration Project increased by about $14,000 for 2012. This change from last years levy represents an increase of about 14%. In reply to comments from the City Administrator, Finance Committee members expressed reluctance in taking monies from the Electric Fund to help offset the projected general levy increase. Discussion was then had as to the merits of using some of the Citys reserves to reduce the general levy for 2012. It was reminded that for 2011, the City was able to keep taxes flat, but bond payments were responsible for the 3% levy increase. Alderman Bern expressed the desire for the City to hold down taxes to a zero percent increase over the next two years. He pointed out that this action would demonstrate to the public how committed council is to not raising taxes. Committee members were cautioned that these municipal reserve monies will be needed when the City eventually loses its LGA funding which represents about 40% of our budget. In order to start plugging some gaps in various departments, the City Administrator requested that council release its hiring freeze for municipal employees in 2012. It was informed that municipal reserves will be used to at least partially fund the upcoming State Street Project, estimated to cost $1.65 million. Committee members were informed that the City intends to fund or bond about 50% of costs for a new fire hall, with its projected share to be about $750,000. The Fire Department plans to contribute the remaining funds needed for this project. Also, if no grants are available, the City has been requested to

fund planned improvements at the library. It was reported that infrastructure improvements for Benjamin and Emily Streets are being planned for 2013; Oak and Elm in 2014, with Thomas Hill either in 2014 or 2015. Members were reminded that the City is responsible for installing the sewer on the East Ashley Street Project which will cost about $265,000. It was next advised that the City has budgeted $200,000 in 2012 for an auto-meter reader system. This is a system which will automatically read water and electric meters. A presentation on this system will likely be made at the next PUC meeting. Monies were budgeted this year for a pilot project using this system which will include 150 homes in town. Mr. Hunwardsen then suggested that the City could use reserves to pay for the increase in bond payments this year for the two Sunset View projects, and then to replenish these reserves through the future sale of lots in this addition. The City Administrator expressed that determination will need to be made whether this recommended approach is appropriate and legal. He also expressed the intent to call Dean Albrecht to inquire as to what if any budgetary plans he had made during his tenure as City Administrator relative to making future bond payments for the Sunset View improvements. Christopherson suggested that via email, and after talking with Mr. Albrecht, he will then solicit this Committees approval of the preliminary budget prior to the next council meeting. He noted that it is his desire to pay for the Citys share of a new fire hall by using electric or water/sewer funds.

Committee members next made several inquiries as to certain, individually listed budget item requests for 2012. Fred Bern expressed the desire for the City to set up a plan whereby utility bills can be sent and paid via email which will save on postage costs. Also, he suggested that the City needs to work with the County from a cost-sharing standpoint whenever we have a piece of equipment which fails and needs to be replaced. Fred Bern reported that the exterior west wall of the old Photo Op building, now owned by the City, is in immediate need of rehabilitation, and that perhaps monies can be taken from the General Fund to pay for this necessary work. It was then pointed out by Mr. Bern that city supervisors have been doing a good job watching their overtime. Administrator Christopherson added that, in his opinion, overtime has value and is not a frivolous use of taxpayers money if it is applied smartly and intelligently.

Dennis Hunwardsen expressed favor of an alternate approach which allows the City to meet the cash needs of making its bond payments in 2012 and at the same time not assessing our taxpayers. Finance committee members expressed the desire to reduce the general tax levy for 2012 to a single digit figure. If the City can approve a general tax levy which stays within the rate of inflation of 2% to 4%, the City Administrator speculated that the public will likely deem such decision as a responsible management of municipal funds. There being no further business, the meeting was then adjourned.

Tax Levy

General Fund Library Fund G.O. Sunset View Bonds of 2004 GO Sunset 2 2009A 2009 River Restoration EDA/HRA Operating Fund

$868,000.00 22,000.00 74,750.00 21,167.00 56,136.00 23,000.00 $1,065,053.00

Tax Abatements AmericInn Motel Overson Lumber Wedgewood Apartments SWMHP Farmers Cooperative Assoc. $ 13,671.30 4,339.00 2,858.51 15,000.00 $ 35,868.81 Revenues GENERAL FUND APPROVED 2011 Taxes Delinquent Taxes Other Licenses & Permits State Aid State Shared Revenue General Government 868,000 17,000 750 41,320 1,020,000 55,500 2,675 1st PROPOSAL 2012 868,000 18,000 4,125 38,600 1,020,000 61,000 2,050

Public Safety Highways/Streets Sanitation Franchise Fees Fines Assessments Interest, etc. Loan pymts/refunds Labor Equip/sales Transfers General Fund

45,000 825 165,000 34,000 26,000 3,400 55,000 18,050 10,600 405,500 2,768,620

34,000 800 161,000 50,000 25,000 4,000 50,000 17,050 11,600 405,000 2,770,225

Enterprise Funds Library Fund Fire Equip. Res. 47,850 35,000 51,750 0 50,800 13,200 4,500 10,100 16,200 2,250 110,785 29,500 56,136 5,500 3,000

Council's Unallocated Res.50,800 Armory TIF Townhouse TIF Westridge/Sunset TIF Gordy's TIF 307-85 Storm Sewer 308-Sunset View 309-Sunset View II 14,700 5,100 11,300 25,300 50 141,600 22,400

310-River Restoration 64,977 337-85 TIF Sunset View 5,600 5,600

Gordy's Project

24,000

0 0 11,000 3,200 4,000 524,000 557,900 3,942,800 70,500 929,250 127,400 539,150 60,150 35,000 500 500 7,159,071

Lowhead Dam Project 35,000 Redevelopment Projects 21,110 501-Perm. Imp. 5,500

502-Recycled Concrete 3,800 Water Fund Sewer Fund Electric Fund Hospital Fund Liquor Fund Airport Fund Cable TV Fund EDA 482,650 508,150 3,600,300 2,056,000 887,800 526,400 541,700 62,020

Revolving Loan Funds 37,500 Small Cities Grant Housing Fund Totals TotalsGeneral/Enterprise 12,009,427 18,500 100 9,240,807

9,929,296

Expenditures Approved 2011 Mayor & Council Administration Elections Audits 37,430 353,114 0 22,000 1st Proposal 2012 34,275 321,700 7,150 22,000

Assessor Law Econ. Development Data Processing Gov't Buildings Police Fire Bldg. Inspections Civil Defense Animal Control Streets Road Equipment Sidewalks/St. Lights Snow Removal Street Cleaning Weeds Garbage Services Ambulance Summer Recreation Parks Indoor Pool Skating Rink Senior Citizens Downtown Unallocated General Fund

22,100 99,750 142,086 33,900 29,650 634,605 239,000 15,500 10,650 1,050 517,192 132,376 14,400 48,450 6,590 6,801 165,000 6,800 45,289 67,696 64,517 5,474 8,920 8,000 74,900 2,813,240

21,100 99,875 146,400 32,900 28,200 525,000 213,850 15,250 11,150 1,050 534,375 124,050 10,500 55,250 5,550 5,285 160,000 6,900 37,850 56,300 64,500 5,600 8,670 8,000 68,125 2,630,855

Enterprise funds Approved 2011 Library Fire Equip. Replace 45,198 89,000 1st Proposal 2012 48,545 50,000 50,800 13,200 4,500 9,600 16,200 249,554 112,800 0 4,000 478,780 45,000 511,285 35,000 3,628,470 250,000 70,500 893,405 35,000 225,970 538,775 35,000

Council's Unallocated 86,000 Armory TIF Townhouse TIF Sunset/Westridge TIF Gordy's TIF Bonds Projects Special Assesments Concrete Recycling Water Transfers Sewer Transfers Electric Transfers Hospital Liquor Transfers Airport Cable TV Transfers 14,700 0 9,000 24,000 192,190 568,200 0 3,800 644,150 40,000 886,883 35,000 3,592,139 250,000 2,056,000 831,649 35,000 631,429 558,667 35,000

EDA/Wedgewood Revolving Loan Funds Housing Purchase Totals Transfers Total Gen/enter.

203,400

35,475

151,000 10,576,905 405,500 13,795,645 7,036,859 405,000 10,072,714

*Note that we are still waiting to hear from our auditors with regards to the transferring of funds to cover Fire department equipment costs *Note we still are working on flow of funds regarding finance committee recommendations to finance a refurbished fire and ambulance building. *Note we may be running low interest loans through USDA for a re-constructed library. *Discussion on how to fund the Circle Drive/State Street project will need to be added. These items will be addressed in the coming weeks and will be part of the final budget request in December.