Agenda Packets - 2022/04/04 - Laserfiche WebLink

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Key 2023 Budget Issues: The February state budget forecast projects a surplus of $9.2 billion for the current biennium (July 1, 2021 thru June 30, 2023). Local Government Aid was projected to increase minimally. In our case, the 2023 amount was estimated to be $857,240 under current law compared with $850,373 in 2022. Future economic conditions may change this and we will have to wait for the legislature as no budget items have been passed. The state legislature is scheduled to adjourn on May 23. The City Council budgeted for 90% of anticipated LGA for 2022 to guard against any legislative cuts or economic weakness associated with the state budget. Inflation has accelerated and is elevated at present. (7.9% February) The Federal Reserve projects inflation to remain elevated for several years but not at the current level. The City's charter cap was recently amended to give the City Council more flexibility to respond to the growing challenges the City faces. The charter cap excludes debt service levies, voter approved levies, and capital project levies from inclusion in the cap calculation. A 1% levy increase would generate an additional $61,789 in tax revenue. Property taxes account for 68.35% of General Fund revenues and operating transfers in. Ramsey County will provide preliminary 2023 values and projections in late August. The City will be negotiating contracts with the two police unions and the public works bargaining group. It is unknown at this time what requests the unions will have. The contracts provided for a 3.0% cost of living adjustment in 2022. This will be the most impactful item on the future budget. 14 employees will receive step or longevity increases in 2023 of 2%to 10% in addition to a COLA. Health insurance premium increases are capped at 7% but could be less, we are considered a large group for 2022 and 2023 (experience rated premiums). We will receive our rate notice in September/October. The impact to the budget will_depend_upon_the-size of_the unknown_rate_increase. The -Cos health insurance contribution was unchanged in 2022 at $1,170 per month compared with $15 increase for 2021. The Council initiated an HSA contribution for employees with family coverage similar to single employees of $200 per month, this made the city more comparable with other cities. The employer's share of PERA will remain at 7.50% for General (non -police) plan members, the PERA General rate has increased from 5.53% in 2005 to 7.50% in 2015. The Police plan will remain at 17 7% The police PERA rate has increased from 9.3% in 2005 to 17.7% in 2020. Current PERA pensions are funded at 87.00% for General Employees Retirement Fund and 93.66% for Police and Fire Retirement Fund. A liability has been recognized in the entity -wide financial statements, (General $1,311,028, Police 1,336,148) as a result of implementing GASB Statement 68. The state legislature controls the resolution of the underfunded pensions. The payroll cost for 54 FT, 8 PT, 9 PW's seasonal employees, and 10-15 Recreation seasonals is $3,529 per hour, $28,232 per day, $141,160 per 40 hour week and $7,340,728 per year. Work comp will increase by $63,998 due primarily to an increase in public safety rates which accounted for $55,033 of the total. Overall, pay and benefit costs will increase by approximately $386,180 across all funds and $301,057 for the General Fund. County dispatch fees were $99,274 in 2022. The 2022 fee decreased $2,779 or 2.72% from the prior year, we have not received the 2023 amounts. The Fire department will have a 3% to 5% increase in operating costs and a larger capital outlay expense for 2023. Our share has been mitigated somewhat by a switch to a fixed percentage formula going forward and retirement of the SLP Equipment Note. (2022 — 15.5%, 2021 — 15.5%, 2020 — 15.998%, 2019 — 16.373%, 2018 — 16.158%, 2017—15.819%)