Q: The budget is still in draft form, and it will be awhile before it's finalized. One of the big items in there that I think people are going to really look at is doing away with the subsidy to the school system. Are you going to have a possible fight on your hands with that?

A: (Weldon) I appreciate the question. I prefer to think of it as visiting a public policy issue that I think needs to be addressed. I know that there's going to be a certain degree of consternation and discomfort and disagreement over this issue.

But again, as I said, my job is to recommend policy changes to the city council; and I've laid out a policy recommendation relative to this one specific issue in the budget . And they've got probably seven different opinions on this issue. But at the end of the day when the smoke clears, the seven of them will collectively decide how that's going to be addressed within the framework of the budget. Whatever their decision is, my recommendation at that point is moot and I'll do whatever they tell me.

I understand the concerns of the school district. If somebody came to me in my budget and said we want to cut your revenue $200,000 or $207,000 to be specific I'd be concerned about that, too.

But it's my job to look after the city budget , and it's Superintendent (Roger) DeGroot's job to look after the school (district ) budget. We're facing a new set of financial realities today, for both school and city finances that really wasn't in effect back 15 years ago. The rules have changed for both of us.

Since public education is not a primary function of the city that's being done by the schools it's my job to look after what I feel is the best way to spend city tax-dollars . And as I look through our budget and "¦ through financing opportunities for the strategic plan and what is the best way to accomplish our goals, I don't think that spending $207,000 to help subsidize the schools' general fund is the way to go. That's the basis of my recommendation.

I understand the history on how it started and how it came to be, and that's instructive and educational; but I don't think of that issue as particularly relevant to the challenges that we're facing today. There's no agenda here. It's just an issue "¦ that city dollars are better spent in other ways for city purposes .

(Munsterman) I applaud Jeff for asking the question; because when we don't take the time to question why we do things, then we're not doing justice for the people when it comes to spending dollars. I haven't arrived at a conclusion yet, but I think it's going to be a good exercise.

Like Jeff said, there's probably seven opinions out there right now on what we need to do. But we will work our way through a process and make a decision on it.

But I do applaud Jeff. It takes some courage to say we're going to do this different or I'm recommending that we do this different. It's causing us to think about why we are we doing what we're doing, what are the ramifications if we don't . I think it's a good exercise to go through. I'm looking forward to those discussions.

Q: Another enterprise fund that is front burner right now is the liquor store. The way I read the outcome of the Tuesday (July 22) meeting was that for now both of you seem willing to let the present status play out before there is any jumping in to making a decision about the city getting out of the liquor business . Did I read that correctly?

A: (Munsterman) I can answer for myself first. Then Jeff can answer for himself.

From my perspective, you're correct in your assessment that I see a plan and I can see how things will play out. As sombebody who's on the council, I want to watch with a watchful eye that they will play out that way and that things will be turning in the direction that they are proposing that they will turn.

If you will remember back, it was probably over three years ago that we had made the decision that we were going to do off-sale agreements. We had headed down a whole different path, and after the election that changed. We ended up putting more money into a liquor store and moving, and we looked at spreadsheets and all this kind of stuff. Now we're at that point again where, OK, are we really going to be able to make the impact that some of us thought would occur?

I still personally question that; but with what I've seen for a plan, I can see where it could work as long as we respect the things that will drive that business.

And we're anticipating a few things: like a percent increase in sales and making sure that we stay in that 2 to 3 percent of expenses each year, not rising above that in conjunction with how much market we do. Those are really the three main indicators that I see in this type of business.

If we respect those three things and those three things happen the way they're planned, then within a certain time, I believe they're right that it will be more profitable than just to go to a straight 10 percent override.

However, we do need to watch that play out and see if that will work or not and if we can make that work from an administrative standpoint. The thing that haunts me a little bit is that I've watched this for seven years. I'm looking at 10 years from now, 20 years from now; the policy decision that we do make today, is it going to be the right one 20 years from now? The best for the people?

That's really the question that's in my mind. But I'm willing to step back and say, OK, let's just watch this yet for awhile; and we have maybe some renewed commitment, because Jeff's just come onboard.

He's analyzed this and already made some changes, which I appreciate. For me it's kind of giving him an opportunity just to see how things do play out.

That's where I'm at.

(Weldon) John, I would concur with your assessment, as well. I recommended to the city council again the other night that they stay the course and let this process work its way through. The council has set some goals for profitability on this operation, and we're going to do everything we can to achieve that.

I put together a multi-point program to help in that direction and reported on that before; so we're implementing that now. But it does take some time. The city has made a significant capital investment in this operation when we started up. We only have one year of operation under our belt under this new scenario. Look at it this way: Any new startup or newly-expanded business would not look at a one-year performance and make that as an indicator as to whether or not they're doing well or not doing well. These things take a little bit of time; and I think we have to have the patience and the perseverance to let this process work its way through.

But by the same token, we have to diligently work hard and realize the goals that need to be met for profitability and work to get that done.

I think it's a good operation for the city. When you look at the combination of revenue from override and retail sales, we're transferring over $400,000 a year to the general fund; and that helps offset the tax burden. It allows us to finance some things that may not be as politically appealing to finance with taxes. It allows us to do a better job of controlling the sale of alcohol in the community.