Budget Workshop
                                           City Hall, Cherokee, Iowa
                                         February 16, 2009 – 5:30 p.m.

A budget workshop was called to order on this date by Mayor Pierce.  Present:  Council Members Leach, Peck, Mallory,
Burkhart, Stieneke, Administrator Eikmeier, Clerk-Treasurer Taylor.

In review of the 2009-10 budget, Administrator Eikmeier gave an overview of the fund balances.

General Fund:  if there are no new revenues, the council will be looking at less programs, fewer open hours and/or
less employees next year.  Annexation is an option and will be studied after updating the city’s land use plan.  Hopefully
this will happen in the next fiscal year.  Major employers that would be affected by annexation expect this and want to
be involved in the process.  Road Use Fund:  restricted by the amount of road use tax the city receives.  In order to
maintain the patching and seal coat program, the budget as proposed would use a portion of local option sales tax funds. 
Although some streets need complete reconstruction, there are some that can go 10-15 more years with seal coat or overlay. 
For complete reconstruction, the cost per block for curb, gutter and street is approximately $300,000.  City Water Utility
Fund:  the healthiest fund, but there is quite a list of projects, which will be prioritized.  Industrial Water Utility Fund: 
rates were increased last fall to eliminate a fund deficit.  There are several capital projects that may require additional
revenue from Tyson’s.  City Sewer Utility Fund:  in the process of receiving bids for an ultraviolet disinfectant project. 
Other projects proposed in the next year include rebuilding the Hwy. 59 south lift station, replace part of the Hwy. 59 south
force main with a gravity line, and install a grinder at the Beech St. lift station.  The approximate cost for these projects
is $300,000 and may be funded by revenue bonds.  Industrial Sewer Utility Fund:  currently has a healthy fund balance with
the ultraviolet disinfectant project in the bidding process for this plant also.  Debt Service Fund:  the next 3 years shows
the highest debt obligation, after which it drops considerably.  That would be a good time to look at issuing new debt for
necessary capital improvements.  Administrator Eikmeier then commented briefly on salaries.  Included in the budget is a
$.48/hour wage increase for employees represented by bargaining units (the 2^nd year of a two-year contract) as well as a
$.48/hour increase for full-time, non-union and supervisory employees.  The Administrator presented a survey, which compares
Cherokee’s supervisory salaries with those of cities of similar size, and it shows that in most cases Cherokee is significantly
behind in most positions.  Because of the status of this years’ budget, there can probably be no adjustments at this time, but
the council needs to look at the salaries to be competitive.  He also pointed out that although the number of full-time
employees has decreased over the years, the service has increased.  Included in projected General Fund revenue is an
increase in the cable TV franchise fee from 1% to 5%.  This is the maximum allowed and would generate an additional
$40,000 per year.  Another source of revenue being reviewed is to charge the State for law enforcement services for
M.H.I. and CCUSO.  The total proposed tax levy rate shows an increase of $2.35/$1000 of assessed value over the current
year.  This is mainly due to debt service obligations. 

Mary Jo Ruppert, Head Librarian, was present to briefly review her budget.  She indicated that through several years of
budget reductions, they have come to rely quite heavily on memorial gifts and the Library Foundation.  She doesn’t want to
exhaust those sources of revenue.  County funding may not always remain at the same level either.  They are currently
operating at the minimum number of open hours needed to retain State funding.  They draw a lot of people from out of
town and the biggest circulation is adult books and DVDs. 

Administrator Eikmeier has asked all departments to put a replacement date on their equipment.  He will then develop a
long-range plan for equipment replacement and capital projects.  The council will also be asked to look at updating fees
for all departments after the budget process is completed. 

A motion by Leach, seconded by Peck, adjourned the meeting at 7:15 p.m.  Motion carried. 

Pam Pierce – Mayor

ATTEST:

Debra Taylor, CMC
City Clerk-Treasurer