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has increased from 9.3% in 2005 to 16.95% in 2019. Current PERA pensions are funded at 75.90% for
<br />General Employees Retirement Fund and 85.40% for Police and Fire Retirement Fund. A liability has been
<br />recognized in the entity -wide financial statements, (General $1,927,948, Police 2,038,680) as a result of
<br />implementing GASB Statement 68. The state legislature controls the resolution of the underfunded
<br />pensions.
<br />The payroll cost for 50 FT 10 seasonal employees is $2,705 per hour, $21,640 per day, $108,200 per 40
<br />hour week and $5,625,169 per year. Work comp will increase by $42,100 due to an estimated change in
<br />our experience mod from .95 to 1.25. Overall, pay and benefit costs will increase by approximately
<br />$257,231 across all funds and $206,094 for the General Fund.
<br />County dispatch fees are being recalculated by Ramsey County. They are evaluating the formula to
<br />determine each participating entities amount. 2018 fees increased $705 or 0.6% to $107,131 we have
<br />not received 2019 amounts.
<br />Fire department costs will increase by about 5-8% in 2019, our share will depend on the cost sharing
<br />formula. Capital costs will increase. (2019 —16.373, 2018 —16.158%, 2017 —15.819%)
<br />Information technology costs (phones, computers, copiers, cameras, squad computers, network switches,
<br />desktop services, virtual servers, internet, email, software, laserfiche, anti-virus, VPN connections, and
<br />facility WiFi) will increase by 3-5%, there is a Metro I -Net meeting on the 15th to get our 2019 budget
<br />amount. The prior year increased $4,163 to $112,960 (Central Service $86,391, Police $53,028,
<br />Community Center $3,200), due to additional network, software license, and desktop support staff costs.
<br />This continues to be an excellent value for the City.
<br />Fuel prices were budgeted at $2.50 for 2018, staff would recommend using $2.60 for 2019.
<br />Overall most revenues that are tied to economic activity will be improving. Investment income will remain
<br />flat to increasing in 2019 as a result of Federal Reserve activities and the modest economic activity. The
<br />franchise fee rate is at 4.00%, the revenue is split between the General fund and the Street Improvement
<br />fund.
<br />2017 General Fund unassigned fund balance is $3,710,891 this represents 53.08% of 2018 budgeted
<br />expenditures and transfers compared with 53.75% for the prior year. The General Fund also has Assigned
<br />fund balance for Levy Reduction of $5,478,848, and $286,800 to balance the subsequent budget. It has
<br />been the Council's policy to draw down the levy reduction funds over time. One of the City's goals is to
<br />develop a sustainable budget. The General Fund deficit will be $525,000 to $575,000 this will be partially
<br />offset by the drawdown of assigned (levy reduction) funds of $250,000. This will leave a deficit of
<br />approximately $275,000 to $325,000 before considering any expenditure reductions or a levy increase.
<br />Conclusion
<br />Staff is looking for direction from the Council on priorities for the budget and property tax levy. The above
<br />items are some of the issues that will drive the 2019 budget and are presented for your consideration.
<br />Respectfully Submitted,
<br />Mark Beer
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