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Key 2020 Budget Issues:
<br />Local Government Aid is projected to increase minimally as long as state revenue projections hold. In our case,
<br />the 2020 amount is estimated to be $744,315 under current law compared with $739,446 in 2019. There are
<br />some proposals at the state legislature that would increase that by $85,000 but we won't have final numbers until
<br />the legislature adjourns in May. (if they don't need a special session) The Council budgeted for 90% of anticipated
<br />LGA for 2019 to guard against any legislative cuts or economic weakness.
<br />Inflation is modest at present. (1.3% - 1.8%) The City's charter cap would allow a levy increase of up to (3.8%) or
<br />($206,253) based on the above inflation and excludes debt service levies, voter approved levies, and capital
<br />project levies from inclusion in the cap calculation. A 1% levy increase would generate an additional $54,277 in
<br />tax revenue. Property taxes account for 66.58% of General Fund revenues and operating transfers in. Ramsey
<br />County will provide preliminary 2020 values in late August.
<br />The City will be negotiating contracts with the two police unions and the public works bargaining group. (Contracts
<br />are thru 2019) The contracts provided for a 3% cost of living adjustment in 2019. 17 employees will receive step
<br />or longevity increases in 2020 of 2% to 10%. Health insurance premium increases are not known, we will receive
<br />our rate notice in mid October. The impact to the budget will depend upon the size of the unknown rate increase.
<br />The City's health insurance contribution increased $30 in 2019 to $1,125 per month compared with $45 in 2018.
<br />The employer's share of PERA will remain at 7.50% for General (non -police) plan members, the PERA General rate
<br />has increased from 5.53% in 2005 to 7.50% in 2015. The Police plan will increase in 2020 by 0.75%. The 2020
<br />employer amount will be 17.7%. The police PERA rate has increased from 9.3% in 2005 to 17.7% in 2020. Current
<br />PERA pensions are funded at 79.50% for General Employees Retirement Fund and 88.80% for Police and Fire
<br />Retirement Fund. A liability has been recognized in the entity -wide financial statements, (General $1,481,207,
<br />Police 1,668,130) as a result of implementing GASB Statement 68. The state legislature controls the resolution of
<br />the underfunded pensions.
<br />The payroll cost for 51 FT 9 seasonal employees is $2,876 per hour, $23,008 per day, $115,040 per 40 hour week
<br />and $5,982,513 per year. Work comp will increase by $11,243 due to an increase in salaries and rates, our
<br />experience mod will be similar to 2019 at 1.14. Overall, pay and benefit costs will increase by approximately
<br />$296,407 across all funds and $243,551 for the General Fund.
<br />County dispatch fees were reduced in 2019 due to the addition of White Bear Lake. 2019 fees decreased $11,921
<br />or 11.2% to $94,793 we have not received the 2020 amounts.
<br />Fire department costs will increase by about 5-8% in 2020, our share will depend on the cost sharing formula.
<br />Capital costs will increase. (2020 — 15.998%, 2019 — 16.373%, 2018 — 16.158%, 2017 — 15.819%)
<br />Information technology costs (phones, computers, copiers, cameras, squad computers, network switches, desktop
<br />services, virtual servers, internet, email, software, laserfiche, anti -virus, VPN connections, and facility WiFi) will
<br />increase by 5-6% due to additional services and storage capacity related to body cameras, laserfiche, and security
<br />cameras. This continues to be an excellent value for the City.
<br />Fuel prices were budgeted at $2.60 for 2019, with a possible gas tax increase being considered staff would
<br />recommend using $2.75 if no increase in the gas tax for 2020.
<br />Overall most revenues that are tied to economic activity will be improving. Investment income will remain flat to
<br />increasing in 2020 as a result of Federal Reserve activities and modest economic activity. The franchise fee rate
<br />is at 4.00%, the revenue is split between the General fund and the Street Improvement fund.
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