11-04-2019 Council Packet - Laserfiche WebLink

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WS – Item 7 WORK SESSION STAFF REPORT Work Session Item No. 7 Date: November 4, 2019 To: City Council From: Sarah Cotton, Finance Director Re: 2020 Budget Background At the September 23, 2019 City Council meeting, a preliminary budget and tax levy was adopted by the Council. The preliminary tax levy adopted by the Council was $10,491,518, an increase of $436,102, or 4.34% over the 2018/2019 tax levy. The levy is estimated to result in a city tax rate of 39.680% for 2020, a reduction from the 2019 tax rate of 41.817% Prior to the City Council meeting on September 23, 2019, Council and Staff met during a Special Budget Work Session to discuss the proposed budget and tax levy. Staff provided information regarding a reduction in health care costs to the City that would result in monetary savings of $39,000. The Council expressed the desire to limit the increase in expenditures year over year to 2%; and therefore, reduce the proposed levy by an additional $60,000. Staff has identified the following cuts to expenditures to meet the $60,000 reduction in the operating levy adopted by the Council: • $10,000 reduction in Surface Water Maintenance • $3,000 reduction in Fleet – Contracted Services – Maintenance & Repair of Fire Apparatus • $24,443 reduction in Paid-On-Call Firefighter wages • $22,576 reallocation of Finance Director wages & benefits to Water/Sewer Enterprise Funds The proposed reductions and reallocation reduce general fund expenditures to $11,195,170, an increase of $141,342, or 2.0% over 2019. At the September 9, 2019 Special Budget Work Session staff reviewed the 2020 Water and Sewer Enterprise Funds with the Council. Council requested that staff prepare a summary of the Enterprise Fund activity over the last few years to aid in the discussion. Staff has prepared a 5-year summary for Council review. Attachments General Fund Forecast Gap Analysis Water and Sewer Enterprise Fund Activity