09-13-2017 Council Packet - Laserfiche WebLink

Home Browse Search

year’s levy increase versus just reducing the tax rate. Another way to think of it is we increase the levy by $150,000; the growth in the tax base from decertifying 3-2 will offset that amount essentially acting like a 0% levy increase. If we can take advantage of Falcon Heights joining the contract group and the decertification of TIF District 3-2, our levy increases by $179,836 while our tax rate projects at 25.001. This means to have an effective 0% impact on a tax payer with no valuation change, we would need to reduce the levy by $29,836. 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 $41,749 in 2018. By maintaining the same amount of LGA in the GF, we are effectively working toward our goal of reducing our GF reliance on LGA given our increasing expenditures. The percentage of LGA in the General Fund in 2017 is 40.9%. In 2018, that percentage drops to 38.5% based on the initial numbers. (Note: We are certified to receive $432,383 of LGA in 2018 versus the $390,634 we received this year. The balance of $285,482 is going to the General Capital Improvement Fund per policy.) On the General Fund revenue side, the one major adjustment is the addition of a reimbursement from Hoggsbreath for the cost of weekend deputy service. This is an offsetting expense in the Sheriff’s Contract. WE also reflect less TIF administrative fees assuming the decertification of TIF 3-2. We have continued to budget building permit revenues very conservatively for two reasons. One reason is without much undeveloped land, it is tough to plan for consistent new construction given redevelopment is usually needed. The other reason is we want to avoid shortfalls during economic downturns that would force other expense reductions to keep the budget balanced. In a year when activity is higher than those projections, we will typically see a transfer to the General Capital Improvement Fund which also helps keep pressure off levy increases to support capital expenditures. On the expense side of things, they are up 6.2% in the General Fund. Some of the major expense drivers are as follows: • Election costs return which adds $17,250. • Sheriff’s costs as previously discussed. • We are anticipating health insurance cost increases of 15%. • From a salary perspective, we projected a 4.0% cost of living adjustment salary scales plus steps. This percentage is higher than the typical cost of living, but I believe we might be lagging in some key positions. Therefore, this budget is more aggressive to accommodate potential adjustments. A more detailed study will be prepared and discussed at a later date. • In the Parks & Recreation area, we budgeted at current staffing levels which increases costs by about $33,500. We also transferred some temp salaries from Public Works to reflect utilization. Overall, this department is up 15.52%.