Agenda Packets - 2015/07/06 - Laserfiche WebLink

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Item No. 4. Meeting Date: July 6, 2015 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: 2016 Draft General Fund Budget There is no state levy limit for 2016. The charter will limit any levy increase to between 3 and 4 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 $655,531 to $666,795. 90% of LGA was included in the 2016 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 has union agreements in place through 2016 providing for 2% cost-of-living adjustments and step increases. Another unknown is health insurance rates, union contracts provide for up to a $40 increase in the City contribution depending on premium increases. The City contribution for 2015 is $990 per employee. The City may have to make state required pay equity adjustments and staff is working on that calculation. General fund Assigned fund balance (levy reduction) will be approximately $5,810,283 at December 31, 2015. The Council has been using a measured draw down of this amount by $250,000 per year. For 2016, the make-up of this amount is approximately $60,000 interest earnings and $190,000 in Assigned fund balance use. The preliminary imbalance is $351,476, after considering the planned draw down of $250,000 there is an imbalance of $101,476. There are a number of options that can be used to close this imbalance. (increase revenues, reduce expenditures, or use fund balance) 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 7th, 2015 at 6pm with a continuation meeting on Monday, December 14th, 2015 at 7pm if needed. Final levy and budget approval may occur at the December 14th meeting. Conclusion Staff is looking for any additional direction from the Council on how they would like to proceed. Respectfully Submitted, Mark Beer