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88 Councilman Petersen questioned the liability of individual Councilmen in case of legal action. The City Attorney stated the City Council is covered, that it would be the obligation of the City Attorney to defend each Councilman, if the suit resulted from any action taken in their capacity of City Councilmen, and that any resulting costs would be an obligation of the City. After further dis- cussion of the points raised, Councilman Henderson moved to accept the Non -Depart- mental Budget, noting the concern of the City Council for a review of the insurance (Memo 5/24/67) seconded by Councilman Bury and carried. (MINUTE ORDER #67-106C) The City Reserves were next considered. Staff explained to the Council what the City Reserves consist of: - 1) The General Budget Reserve required by the Charter in the amount of $250,000 which was being re -appropriated; 2) An Emergency Reserve which is needed to supplement the General Reserves during the "dry period", of which $150,000 is being reappropriated and to which the City Council by its action at the meeting of May 17th, had added $25,000, bringing this Reserve to a total of $1755000; 3) A Contingent Reserve called the "Budgeted Reserves" in the amount of $•]25,000 from which the City Council appropriates needed sums during the fiscal year for items which could not be anticipated and budgeted individually during the preparation of the Budget. The total of these three Reserves is $550,000. There was a prolonged discussion as to the use and character and need of each of these Reserves. The action of the Council on May 17th, in adding $25,000 to the Emergency Reserve, which constituted the amount used during the 1966-67 Bud- get for the costs of controling the Farm Hill slide, was reviewed. It was sug- gested that inasmuch as the earth removed from the slide area was placed on City - owned property, thus enhancing the value of that property, this could justifiably be considered a Capital Improvement and expense be met from Sales Tax Capital Improvement Funds. The City Attorney assured the Council that this provision could be made in the Ordinance adopting the Budget. Councilman Bury moved that the third Reserve of $125,000 be reduced to $50,000, and to take thei.$25,000 which Council had added to the Emergency Reserve out of Sales Tax rather than General Fund money. Councilman Petersen stated that while he had been opposed to any change in the Sales Tax formula, he considered that this action was justified on the basis of the enhancement of the value of the City property which had received the fill, and for that reason would favor-i payment for the fill from Sales Tax. Councilman Henderson pointed out that the money used for removing the fill had come out of the General Fund and suggested that, if the City places a $25,000 value on the fill, it might be necessary to include a payment to the original owners of the fill. Staff assured the Council that the cost of any fill is not in the dirt W 24 '6t