Agenda Packets - 2016/07/05 - Laserfiche WebLink

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Item No. 1. Meeting Date: July 5, 2016 Type of Business: Work Session City Administrator Review: ______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: 2017 Draft General Fund Budget There is no state levy limit for 2017. The charter will limit any levy increase to between 2 and 3 percent. City departments have been refining their budgets and more adjustments will occur as more accurate information becomes available. The state has concluded the current legislative session with Local Government Aid (LGA) proposed to increase from $666,795 to $671,517 this could increase to $735,514 if the Governor and the Legislature can agree on a special session. The tax bill that contained the LGA increase was pocket vetoed by the Governor. 90% of LGA was included in the 2017 budget and there is no levy increase included at this time. Ramsey County will hold their annual tax meeting at the end of August, they will release preliminary valuation information at that time and staff will be able to calculate the preliminary tax rate and the effect on properties. The Department of Labor Statistics will release inflation data around August 12th. The City will be negotiating union agreements for 2017 through 2019. Another unknown are health insurance premiums. The City contribution for 2016 is $1,010 per employee. General fund Assigned fund balance (levy reduction) will be approximately $5,636,995 at December 31, 2016. The Council has been using a measured draw down of the levy reduction fund balance by $250,000 per year. The preliminary imbalance is $349,365, after considering the planned draw down of $250,000 from the levy reduction fund balance there is an imbalance of $99,365. There are several options that can be used to close this imbalance. (increase revenues, reduce expenditures, use fund balance, or a combination of all three) The City needs to certify a preliminary levy and General Fund budget to the County by September 30th. This can be done anytime over the next few months. Once set the levy can go down but not up. The City will hold a truth in taxation meeting on Monday, December 5th, 2016 at 6pm with a continuation meeting on Monday, December 12th, 2016 at 7pm if needed. Final levy and budget approval may occur at the December 12th meeting. Conclusion Staff is looking for any additional direction from the Council on how they would like to proceed. Respectfully Submitted, Mark Beer