08/18/2008 Council Packet - Laserfiche WebLink

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The draft budget for 2009 remains out of balance by $71,619. Revenues are estimated at $9,988,971, while expenditures are proposed at $10,060,590. Revenues, as directed by the City Council, have been projected very conservatively for the coming year. Expenditure requests have been scrutinized by the management team, with substantial reductions being made to the original amounts requested. These reductions have been across the entire budget. Areas and items reduced or eliminated include new personnel requests, contractual engineering and feasibility studies, operating supplies and capital outlay across all departments, storm water and street maintenance (held to 2008 levels), capital equipment replacement program, trail extensions and the budgeted contingency. Altogether the proposed budget has already been reduced nearly $542,000. To eliminate the gap between the projected revenues and expenditures, staff has identified the following alternatives: Increase Revenue — this may include a less - conservative approach to estimating revenues, or initiating new revenues, such as extending utility franchise fees or implementing a storm water utility. Reduce Capital Costs — while these costs have already been significantly reduced, there may be areas to consider for additional reduction. Reduce Personnel Costs — 2/3 of the budget is comprised of personnel related costs. Much of the other direct "soft" expenditures have already been reduced to "questionable" limits. The budget gap could be filled through the reduction of personnel in key areas, either though attrition, reduced hours (i.e. from full time to 80 %), or lay -offs. Use of Fund Balance — the general fund balance could be tapped to eliminate the budget gap. The fund balance stands at about 50% of proposed expenditures. A combination of the above. Staff is requesting further direction from the City Council in closing this gap. Additionally, definitive data from the Department of Revenue (due 9/1) and Anoka County (late August -early September) will also help to clarify our situation. Please review the budget and note your comments and questions you would like to discuss. The directors will be available to address your questions on their departmental budgets. Should you have any questions that would involve any research prior to the approval of the proposed budget and preliminary levy in September, please call me so that I may do the necessary legwork to ensure an informed discussion. Cc: City Administrator Directors • • •