Agenda Packets - 2015/06/01 - Laserfiche WebLink

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The employer’s share of PERA will remain at 7.50% for Coordinated (non-police officer) plan members, PERA coordinated rates have increased from 5.53% in 2005 to 7.50% in 2015. The Police plan will remain at 16.2% police PERA rates have increased from 9.3% in 2005 to 16.2% in 2015. A new GASB financial reporting standard will require us to report our share of any unfunded or surplus pension amount as a liability or asset in our financial statement. (currently PERA is in an underfunded position so a liability will be reflected in our financial statement) The payroll cost for 49.75 FT employees is $2,431 per hour, $19,448 per day, $97,240 per 40 hour week and $5,055,601 per year. Work comp will increase by $39,900 due to a significant change in our experience mod from 1.33 to 1.63. Overall, pay and benefit costs will increase by approximately $199,216 across all funds and $164,329 for the General Fund. There is an additional unknown, the City has to submit for State Pay Equity compliance on January 1, 2016 and any changes to comply must be in place by December 31, 2015. Staff will be conducting a preliminary calculation to determine if we are out of compliance and develop a plan to come back into compliance if we are. County dispatch fees will increase by a minimal amount, 2016 proposed fees will increase $219 or 0.2%, 2015 fees increased $8,903 or 8.82% to $109,819. Fire department costs will increase by about 3-5% in 2016, our share will depend on the cost sharing formula. Capital costs should be stable. Information technology costs will increase by $3,000 to $68,000 for 2016 due to additional PD costs. This continues to be an excellent value for the City. Fuel prices were budgeted at $3.00 for 2015, staff would recommend using $2.75 for 2016. Overall most revenues that are tied to economic activity will be flat to improving. Investment income will remain flat to increasing in 2016 as a result of Federal Reserve activities and the weak economic recovery. The franchise fee rate is at 4.00%, the revenue is split between the General fund and the Street fund. The revenue generated from this fee will be dependent on commodity prices and economic activity in 2016 but should be consistent with 2015. 2014 General Fund unassigned fund balance is $3,334,542 this represents 52.37% of 2015 budgeted expenditures and transfers. The General Fund also has Assigned fund balance for Levy Reduction of $6,000,280, and $250,000 to balance the subsequent budget. It has been the Council’s policy to draw down the levy reduction funds over time. One of the City’s goals is to develop a sustainable budget. The General Fund deficit will be $325,000 to $350,000 this will be partially offset by the drawdown of assigned (levy reduction) funds of $190,000 ($250,000 – int. $60,000). This will leave a deficit of approximately $135,000 to $160,000. Conclusion Staff is looking for direction from the Council on priorities for the budget and property tax levy. The above items are some of the issues that will drive the 2016 budget and are presented for your consideration. Respectfully Submitted, Mark Beer