07/26/2012 Council Packet - Laserfiche WebLink

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• • • Memorandum To: Mayor and Council Members From: Ai Rolek Date: July 26, 2012 Re: 2013 Draft Budget and Tax Levy Transmitted herewith is the first draft of the 2013 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 2013 budget draft includes the resources needed to continue the City services at their present levels and increases the City's efforts in toward street maintenance and capital equipment replacement needs. The draft includes staff wage adjustments at 1% and adjustments in the City's contribution toward estimated health insurance premiums. 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, interest rates, grant awards and other revenues continue to lag due to economic conditions, increasing reliance on the property taxes even as property values continue to sag by over 6 %. The draft budget calls for expenditures of $9,162,438, a slight decrease from the 2012 adopted budget mostly as a result of staff adjustments during the year. Assuming that the levy is maintained at the 2012 level, the gap between expected revenues and proposed expenditures is $445,369. This gap is the result of a number of factors: 1. The tax levy was lowered for 2012 and fund surplus was used in its place to balance the 2012 budget. This created an automatic funding gap for 2013. 2. Non -tax revenue, such as building and construction permits, interest revenue, etc., has not rebounded since the economic downturn. 3. Funding for capital outlay, such as street maintenance and equipment replacement as prioritized by the Council, is increased in the draft budget.