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City Council Regular Meeting Minutes August 28, 2018 Page 3 I The 2019 Budget Calendar was reviewed. Finance Director Shelly Rueckert reviewed Staff is 2 proposing a 2019 overall levy of $7,311,453. The 2019 proposal represents an increase of 3 $461,442 or a 6.74% increase from 2018. The components of the 2019 proposed levy were 4 provided. The standard parameters for preparing the General Fund Budget and Levy include City 5 revenues budgeted using current run rates for sources that are subject to trends and conservative 6 baseline estimates for re- occurring aids and charges for services; expenses budgeted at amounts 7 that will maintain present level of City services; and, Liquor transfers are based on current 8 operating results. 9 10 The General Fund Budget and Levy cost drivers were reviewed. Each year the General Fund 11 revenue and expenditure budget line items are examined for changes in expected 12 collections /charges, labor adjustments, changes in contract rates, insurance rates, utility costs, 13 usage of various materials or needs, etc. The findings of this examination produce the drivers 14 associated with the proposed 8.77% in the General Fund Levy. 15 16 Ms. Rueckert reviewed the expenditures in detail. Personnel costs — 69.6% of expenditures, costs 17 increased by $165,325 or 3.41%. Contracted services — 7.7% of expenditures, overall increase of 18 $59,881. Other Insurance Costs — 4.1% of expenditures, overall costs higher by $55,601 or 19 23.50% Pass through costs — 4.3% of expenditures up $25,725. Funding for initiatives below at 20 $10,000 each, for a total increase of $40,000 — 1.01% impact on General Fund Levy and 0.58% 21 impact on Overall Levy, 0.6% of General Fund expenditures. Remaining budget line items — 22 13.9% of overall expenditures or $992,801, costs up $17,279 or 1.77 %. Higher gasoline costs 23 substantially accounts for the increased cost. 24 25 Ms. Rueckert reviewed the revenues including transfer of Liquor operating profits maintained at 26 2018 level. The HRA Budget and Levy cost driver is substantially personnel and professional 27 costs. The proposed Levy increase for the HRA is 475% or $7,720. The 2019 Debt Related 28 Levies are proposed to increase by $75,143 over the 2018 combined levies. A levy reduction 29 program (Peak to Plateau) began in 2014 to stabilize the annual increase in levies created by the 30 annual street reconstruction plan. Without the use of resources committed to this program the 31 impact of 2018 street bonds issued along with existing debt service requirements would have 32 required an additional 6.38% increase in the overall Levy. The 2019 Capital Improvement 33 Program (CIP) and the 2019 Building Improvement levies are proposed to increase by $25,000 34 and $5000 respectively. CIP and Building Improvement levy increases agree to Long term 35 capital plan, to maintain replacement schedule. 36 37 VII. REPORTS FROM CITY MANAGER AND COUNCIL MEMBERS. 38 39 City Manager Casey reported the Organics proposal went to Ramsey County where it was 40 approved and now the City is waiting for construction. On September 4, it will be Custard with a 41 Cop from 4 -6 p.m. at Culver's in St. Anthony. 42 43 Councilmember Stille stated on August 20 he attended a work session with the Council and on 44 August 27, 2018 he attended the Planning Commission Meeting. 45 46 Councilmember Gray stated he attended the work session on August 20.