CC PACKET 12092014 - Laserfiche WebLink

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DATE: TO: FROM: MEMORANDUM December 1, 2014 Honorable Mayor and City Council Mark Casey , City Manager Shelly Rueckert, Finance Director ITEM: GENERAL FUND BUDGET/LEVY At the August 4th work sessions, the City Council and Staff reviewed the 2014 General Operating, Road Improvement and Capital Equipment Budgets . Additionally, public meetings were held April 22nd , August 26th and September 9th for public input on the budget process . Based on this process with the Council, Staff has prese nted 2015 levies totaling $5,831,737. This represents a $218,900 increase which equates to a 3.9% percent increase compared to 2014 levies. The parameters for preparing the underlying budgets included: 1) Revenues are budgeted using current trends for variable revenue sources and conservative estimates for stable revenue sources. Expenses are budgeted at amounts that will maintain present level of City services. 2) Cumulative use of 2014/2015 Local Government Aid of $505,415 as follows: • 33% Reduced reliance on Liquor profits and reduced cost allocations to utility funds • 37% Property Tax Relief, negating the impact certain cost factors • 22% Addressing severance obligations, risk management • 8% Property Tax Relief, supplanting decreases in revenues and other aids 3) Budget cost drivers include the following: • Union and Non -Union wages adjustments -2.25% • Health Insurance premiums increase -10.5% • State pension funding rates up 3 .5% -5.9% • Worker's Compensation costs up 13 % • Liability and Casualty premium costs up 12.25% • Energy related expenses increased at various rates 4) Factors impacting Road levy increase include: • Addition of 2014 Road Project debt requirements • 2008 Road debt restructuring (mitigating factor) • Scheduled Debt Levy Reduction of $147,500 (mitigating factor) 35