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has increased from 9.3% in 2005 to 16.95% in 2018. Current PERA pensions are funded at 68.90% for
<br />General Employees Retirement Fund and 63.90% for Police and Fire Retirement Fund. A liability has been
<br />recognized in the entity-wide financial statements, (General $2,598,241, Police 6,380,947) as a result of
<br />implementing GASB Statement 68. The state legislature controls the resolution of the underfunded
<br />pensions.
<br />
<br />The payroll cost for 50 FT 10 seasonal employees is $2,580 per hour, $20,640 per day, $103,200 per 40
<br />hour week and $5,367,253 per year. Work comp will decrease by $20,379 due to an estimated change in
<br />our experience mod from 1.25 to 1.00. Overall, pay and benefit costs will increase by approximately
<br />$226,362 across all funds and $195,398 for the General Fund.
<br />
<br />County dispatch fees are being recalculated by Ramsey County. They are evaluating the formula to
<br />determine each participating entities amount. 2017 fees increased $705 or 0.6% to $107,131.
<br />
<br />Fire department costs will increase by about 3-5% in 2018, our share will depend on the cost sharing
<br />formula. Capital costs should be stable. (2017 – 15.819%, 2016 – 16.099%)
<br />
<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 $4,163 to $112,960 (Central Service $86,391, Police $53,028, Community
<br />Center $3,200) for 2018 due to additional network, software license, and desktop support staff costs. This
<br />continues to be an excellent value for the City.
<br />
<br />Fuel prices were budgeted at $2.30 for 2017, staff would recommend using $2.50 for 2018.
<br />
<br />Overall most revenues that are tied to economic activity will be flat to improving. Investment income will
<br />remain flat to increasing in 2018 as a result of Federal Reserve activities and the modest economic activity.
<br />The franchise fee rate is at 4.00%, the revenue is split between the General fund and the Street
<br />Improvement fund.
<br />
<br />2016 General Fund unassigned fund balance is $3,538,754 this represents 53.75% of 2017 budgeted
<br />expenditures and transfers. The General Fund also has Assigned fund balance for Levy Reduction of
<br />$5,656,709, and $250,000 to balance the subsequent budget. It has been the Council’s policy to draw
<br />down the levy reduction funds over time. One of the City’s goals is to develop a sustainable budget. The
<br />General Fund deficit will be $425,000 to $475,000 this will be partially offset by the drawdown of assigned
<br />(levy reduction) funds of $250,000. This will leave a deficit of approximately $175,000 to $225,000 before
<br />considering any expenditure reductions or a levy increase.
<br />
<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 2018 budget and are presented for your consideration.
<br />
<br />Respectfully Submitted,
<br />
<br />
<br />
<br />Mark Beer
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