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Overall most revenues that are tied to economic activity will be flat. Investment income <br />will remain flat in 2011 as a result of interest rate cuts and a weak economy. The <br />franchise fee rate is at 3.79%, the revenue generated from this fee will be flat in 2011 as <br />a result of lower energy costs and reduced economic activity. <br /> <br />2009 General Fund reserves are $2,756,516 this represents 48.5% of 2010 budgeted <br />expenditures and transfers. Fund balance increased by $101,419 for 2009 as a result <br />of decisions the City Council made in an effort to off-set additional LGA cuts in 2010. <br />The City’s budget has been under pressure for several years due to LGA cuts at the <br />state level, with very little left in discretionary budget items. The Council will need to <br />give direction on how they would like to resolve the coming General Fund deficit. One <br />of the City’s goals is to develop a sustainable budget. The deficit will be $300,000 to <br />400,000. Some items the Council can consider are: <br /> <br />Reduce services/hours/personnel <br />Increase transfers <br />Increase the property tax levy <br />Use fund balance <br /> <br />Conclusion <br />Staff is looking for direction from the Council on priorities for the budget and property tax <br />levy. The above items are some of the issues that will drive the 2011 budget and are <br />presented for your consideration. <br /> <br />Respectfully Submitted, <br /> <br /> <br /> <br /> <br />Mark Beer