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515 Little Canada Road, Little Canada, MN 55117 -1600 <br />(651) 766 -4029 / FAX: (651) 766 -4048 <br />www.ci.Iittle- canada.tni.us <br />MEMORANDUM <br />TO: Mayor Blesener and Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />Sharon Provos, Finance Director <br />DATE: September 7, 2013 <br />RE: 2014 Proposed Budget <br />MAYOR <br />Bill Blesener <br />COUNCIL <br />Rick Montour <br />John Keis <br />Michael McGraw <br />Shelly Boss <br />ADMINISTRATOR <br />Joel R. Hanson <br />The first draft of the proposed 2014 Budget is being presented for your consideration. With this <br />information, we need to establish our preliminary levy by the September 15t1i deadline. While this <br />budget document includes the General Fund, Special Revenue Funds, Debt Service Funds, TIF /HIA <br />Funds, Capital Improvement Funds, the Water Fund, and the Sewer Fund. The primary focus of our <br />review is the funds that require tax levy support. <br />The 2014 levy included in the budget document reflects a 3.00% gross levy increase and a 1.84% net <br />levy increase (see page 1 of the budget document). This was based on our discussions this past <br />summer dealing with the Financial "what if' scenarios. A primary goal of those discussions was to <br />continue to minimize our reliance of Local Government Aid (LGA). We are set to receive $148,982 <br />more LGA in 2014 ($344,825) than we did in 2013 ($195,843). <br />On the revenue side with a 3% gross levy increase, we are using $32,085 more Local Government <br />Aid (LGA) in 2014 versus 2013 if we are to balance the budget based on the assumptions made. <br />(The balance of the LGA distribution is shown in the General Capital Improvement Fund.) We have <br />also used a transfer of $81,520 from Water /Sewer Capital Replacement Account that will offset by a <br />debt levy of the same amount to be used for the new Public Works Building. <br />You will also remember that in our scenario discussions, we utilized assumed expense increases of <br />3% for all costs except police and fire which were estimated at 4 %. Overall, General Fund expenses <br />ended up at 3.93 %. Some of the expense increase drivers are as follows: <br />• Election costs up 436% ( +10,115) being an even numbered year. <br />• Fire Department at 9.9% ( +35,172) largely attributable to a requested increase in support to <br />the Fire Relief Association from $15,000 to $31,000. <br />• Protective Inspections at 5.0% ( +8,573) mostly due to higher electrical inspection costs. <br />H: \SharonP \Budget 2014\2014 Preliminary Budget Memo - 9.8.13 (2).docx <br />