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MEMORANDUM To: City of Saint Anthony Village City Council From: Deborah Maloney, Finance Director and Charlie Yunker, City Manager Date: August 27, 2024 City Council Meeting Request: 2025 Preliminary Levy & General Fund Budget BACKGROUND The 2025 budget and levy process began on June 11th when a revised Street Improvement Plan was presented for the City Council’s consideration of 2025 improvements that included street reconstruction and mill and overlay improvements. Staff also reviewed the extensive mill and overlay projects for 2024 and 2025 and the resulting impact on the 2025 debt service levy. At the June 25th City Council work session, the City Council and staff reviewed the updated Street Improvement schedule and its impact on the 2025 Debt Levy. The Debt Levy provides funding for 2025 debt service payments for the Road Improvement debt, Lease Revenue debt (city buildings) and the Tax Abatement debt (parks and sidewalks). The proposed 2025 Debt Levy is part of the requested approval of the Preliminary Levy for 2025 at tonight’s City Council Meeting and Public Hearing. At the July 9th work session, Staff provided the City Council with an early projection regarding the overall levy and General Fund Budget incorporating known cost increases and inflationary assumptions. This included the Housing Redevelopment Authority (HRA), Capital Equipment, Building, Parks and Infrastructure Improvement Funds. Council affirmed the adjustments to the various capital levies that are consistent with the long‐term capital plans and directed staff to incorporate the items discussed into the 2025 Budget and Levy, and expressed the desire for a levy increase of no more than 5%. Staff continued to analyze actual costs with new information provided by vendors, contractual service providers, and labor negotiation developments, which were presented at the August 15th Council work session and an updated presentation at the August 27th Council Meeting. Staff presented the draft 2025 budget and levy on August 27th projecting a 4.65% levy increase. Since that meeting further negotiations have taken place with the city’s labor unions, and information from comparable cities show that market adjustments are needed across all functions to remain competitive. Negotiations are still on‐going, and as a result staff is proposing to set the Preliminary Levy at the number below, which represents a 6% increase over 2024. This will allow for flexibility to complete labor negotiations and would be the high mark for the 2025 levy. Staff will present options to bring the levy increase at or below 5% for consideration before the Truth in Taxation presentation on December 10, 2024. The Levy proposed below reflects these work session discussions. The proposed 2025 overall levy is $9,742,239, which represents an increase of $551,106 or a 6.00% increase compared to the 2024 overall levy. 2024 $ Change 2025 % Change General Fund 5,938,338$ 458,606$ 6,396,944$ 7.72% HRA Fund 209,414 209,414 0.00% CIP Fund 368,200 60,000 428,200 16.30% Combined Debt Service & Infrastructure Funds 2,562,181 ‐ 2,562,181 0.00% Building Improvement Fund 98,000 17,500 115,500 17.86% Park Improvement Fund 15,000 15,000 30,000 100.00% Total 9,191,133$ 551,106$ 9,742,239$ 6.00% 17