CC WORKSESSION 08032009 - Laserfiche WebLink

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MEMORANDUM DATE: July 16, 2009 TO: Mayor and Councilmembers FROM: Mike Morrison, City Manager Roger Larson, Finance Director ITEM: PROPOSED 2010 OPERATING BUDGET Overview: Staff has prepared a proposed 2010 Operating Budget totaling $5,308,700. This represents an $84,000 dollar increase =1.61 %. The budget was formulated using the following criteria: 1) 0% increase in salaries. 2) $100.00 increase in the employer health insurance contribution. A. The employee increase is estimated at $117.00. B. 2009 - Percentage of Employer/Employee: a. City pays 55.3% b. Employee pays 44.7 %. C. 2009 - Metro Cities Average: a. Employer62.1% b. Employee 37.9% D. 2010 - Estimated at 53.7% Employer, 46.3% Employee. 3) Adjusting most line items closer to actual expenditures. The proposed 2010 operating budget includes a levy of $2,980,370 and represents a $34,859 dollar increase = 1.18 %. Levy limits continue in 2010 and at this time the City has not received notification of its levy limit from the Department of Revenue. Staff worked with the League of Minnesota Cities to calculate an estimated levy limit (see calculation below) which is $2,071 higher than the amount needed to balance the budget. In addition, the City has the ability to levy outside the levy limit for its losses in Market Value Credit ($68,000 loss in 2008 and the $135,000 in 2009). Staff is not proposing the City do this because it would increase the levy and property taxes. Review of Budgeting Process: At the direction of the City Council, restructuring of the 2010 Budget was done to adjust the budgeted expenditures closer to actual costs. Salaries budgets are based on taking 2008 actual costs, adding 3.5% for 2009 with a 0% increase slated for 2010. An example of the method used to calculate a salaries budget would be as follows: General Management — 2008 actual salaries $78,395 times 3.5% for 2009, with a zero percent increase in 2010 = $81,138 (2010 Budget set at $81,200)