08-12-13 Council Packet (2) - Laserfiche WebLink

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WS— Item #10 WORK SESSION STAFF REPORT Work Session Item No. 10 Date: July 30, 2013 To: Mayor and Council Members From: Al Rolek Re: 2014 Draft Budget and Tax Levy Transmitted for your review is the first draft of the 2014 Budget and tax levy proposal. The draft was prepared by department directors and reviewed by the City Administrator with the intention of providing the resources needed to continue city services at their current levels. The draft also incorporates the priorities and initiatives identified by the City Council. Draft Budget. The 2014 draft budget is balanced with resources and expenditures of $8,947,775, a 1.2% increase from the 2013 adopted budget. The draft includes the resources needed to continue the City services at their present levels and maintains the City's efforts toward street maintenance. The budget includes a two percent wage increase, as well as PERA contribution increases and adjustments in the City's contribution toward estimated health insurance premiums. With the exception of the elimination of the Economic Development Coordinator position, the draft maintains personnel at 2013 levels. Increases in fuel costs and electric rates are reflected in the draft. Adjustments have also been made in consideration of the sales tax exemption. Expenditure estimates in all areas continue to represent only what is required to continue services at their current levels. No new initiatives, capital outlay, or other increases have been included in this draft. Construction and development activities have improved over the last year, and other revenue areas, such as MSA, have also shown some improvement. Interest income and other revenues continue to lag, increasing reliance on property taxes. To reduce the strain on property tax levels the draft includes the use of $165,947 in general fund reserves, the same level as in the adopted 2013 budget. The general fund reserve balance would continue to be maintained at a level greater than 52 percent of annual expenditures. Also included in the proposal is the use of drug forfeiture funds to fund a police sergeant position. This is a one -time use of funding for the 2014 budget.