09-14-2022 Workshop Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of City Council FROM: Sam Magureanu, Finance Director REVIEWED BY: Chris Heineman, City Administrator DATE: September 14, 2022 City Council Workshop RE: Discussion on 2023 General Fund Operating Budget and Levy BACKGROUND: The budget document is a planning and management tool for implementing the community's vision as identified in the Comprehensive Plan and the City Council's Strategic Plan in order to ensure the ongoing provision of consistent and cost-effective public services. While the primary purpose of this workshop will be to focus on the General Fund as the city’s chief operating budget, we will also be highlighting some of the larger capital projects that are currently included in the 2023-2032 Capital Improvement Plan (CIP). On August 24th, at the workshop council meeting, City staff presented the details of the major components of the 2023 proposed General fund budget and its impact on the 2023 Property Tax Levy. Since the workshop, staff has made one major change that would lower the 2023 Property Tax Levy by approximately 1%. The change relates to an update to the current Revenue Policy to change levy amount safe margin from 97.5% to 98.5% for the sum appropriated to the General Fund. Please note that this change has been implemented in the information presented with this memo. Further, the City of Little Canada is required to establish a preliminary levy by September 30th. The preliminary levy may be decreased before the final adoption in December, but it may not be increased. Following this meeting City staff will be asking Council to consider approval of the 2023 Preliminary Levy based on the information presented at this work session at the regular City Council meeting. OPERATING LEVY AND TAX RATE Since personnel services (salaries & benefits) represent one of the primary expenditures in the proposed budget, staff is providing two different Cost of Living Adjustments (COLA’s) and calculated two different options/scenarios for the operating levy and tax rate: 1. 3.30% COLA – This rate was calculated by using the averages rate from Cities Survey. The Survey included 14 cities with rates varying COLA’s ranging between 3.00% and 4%. 2. 4.70% COLA – Calculated by using the approach that has been used in the last several years: a. 75% weight of COLA’s (Average of 3.30%) in survey of Cities b. 25% weighting of Consumer Price Index (CPI) increase (8.7%) from May 2021 to May 2022 Note: The 2023 COLA is in addition to step increases of 3.25% based on the approved wage scale. For 2023 there is one employee that is not eligible for a step increase.