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Ltt1eC uanada 515 Little Canada Road, Little Canada, MN 55117-1600 (651) 766-4029 / FAX: (651) 766-4048 www.ci.little-canada.mn.us MEMORANDUM TO: Mayor Keis and Members of the City Council FROM: Joel Hanson, City Administrator Sharon Provos, Finance Director DATE: September 4, 2014 RE: 2016 Proposed Budget MAYOR John Keis COUNCIL Rick Montour Michael McGraw Tom Fischer Christian Torkelson ADMINISTRATOR Joel R. Hanson The first draft of the proposed 2016 Budget is being presented for your consideration. With this information, we need to establish our preliminary levy by September 30th. While this budget document includes the General Fund, Special Revenue Funds, Debt Service Funds, TIF/HIA Funds, Capital Improvement Funds, the Water Fund, and the Sewer Fund. The primary focus of our review is the funds that require tax levy support; predominately the General Fund. The 2016 levy included in the budget document reflects a 5.33% gross levy increase and a 6.25% net levy increase (see page 1 of the budget document). This reflects a dollar increase in the gross levy of $153,359 plus a slight decrease in our fiscal disparities distribution of $673. With our 4.14% tax base growth, our projected tax rate is up 2.02% from last year. This budget maintains our current amount of Local Government Aid (LGA) usage in the General Fund ($146,901) even though our LGA allotment is increasing by $8,291for 2016. By maintaining the same amount of LGA in the GF, we are not attaining our previously established goal of reducing our GF reliance on LGA. (Note: We are certified to receive $386,820 of LGA in 2016 versus the $378,529 we received this year. The balance of $239,919 is going to the General Capital Improvement Fund per previous direction.) Staff is not recommending the levy increased shown. By presenting the budget in this manner, you can see the full impact of some of the staffing changes we have discussed coupled with other operational cost increases summarized below. Assuming the Council will prefer to lower the levy from the amount shown in the document, we have indicated what dollar reductions (that can be made up of expense reductions or revenue increases) are necessary to attain various potential levy percentage increase targets. They are as follows: H:\SharonP\Budget 2016\2016 Preliminary Budget Memo - 9.04.15.docx