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City Council Regular Meeting Minutes <br />September 10, 2024 <br />Page 3 <br />1 Fire <br />2 Public Works <br />3 Finance <br />4 Parks <br />5 <br />6 In 2024, the average homeowner paid $1,693 for City services for a home valued at $411,250 <br />7 ($141/month). A chart showing 2025 General Fund Expenditures was displayed. <br />8 <br />9 Ms. Maloney reviewed the 2025 Budget Cost Drivers as follows: Personnel Costs – 71% of <br />10 expenditures, overall budgeted costs increased by $759,652. The 2025 base wage increase is <br />11 based on the anticipation of City’s unions accepting a 3% cola along with appropriate market <br />12 adjustments. The net cost impact on the reoccurring wage base is $442,961. Other factors <br />13 creating the additional $233,766 in costs are as follows: <br />14 The Police Department budget includes the full-year impact of restoring the lieutenant <br />15 position and adding a VCET officer in 2024. These additions occurred mid-year. The <br />16 budget impact is an increase of $152,860 in 2025. <br />17 Similarly, the assistant fire chief position was added midyear in 2024, the impact of the <br />18 full year of the position in 2025 will be an increase of $68,828. <br />19 Union negotiations are still ongoing, with high market demands driving up requests and <br />20 having a more significant impact on the levy than in previous years. <br />21 Health insurance premium increase of 9.1% is shared 50/50 by the City and the <br />22 employees. The 2025 impact of the shared increase is $72,925 (includes elected coverage <br />23 changes from 2023 to 2024). <br />24 <br />25 Contracted Services – 10% of expenditures, net decrease of $60,980 mainly as a result of <br />26 Hennepin County Board of Commissioner’s decision to no longer charge cities for assessing <br />27 services; this will be levied through the County’s levy going forward. <br />28 Construction permits inspections budgeted at an increasing baseline activity has resulted <br />29 in greater expense of $5,394. This increase has no impact on the levy as the inspection <br />30 fee is a percentage of permit revenue received. <br />31 Assessor (decrease of $82,000), attorney – reduced budgeted contingency, auditor, <br />32 engineer and planner services reflect rates and activity in these accounts. The net result of <br />33 these factors is cost decrease of $107,000. <br />34 Contracted information technology costs up $22,383. <br />35 Miscellaneous service contracts are estimated to increase by $18,940. This is driven by <br />36 police and fire increases in contracted costs, and remaining costs impacted by inflation. <br />37 <br />38 Other Insurance Costs – 5% of expenditures, overall costs up by $17,575. <br />39 The worker’s compensation insurance experience rating improved by 11% in the 2024- <br />40 2025 renewal period, combined with overall rate reductions of 15% resulted in a savings <br />41 of 16.86% for the 2024/2025 policy renewal, resulting in a savings of $58,230 in <br />42 workers’ compensation premiums for the policy year. The budget year is a combination <br />43 of half prior renewal period rates and half current renewal period rates, resulting in a <br />44 small overall increase when combined with the prior year increase of 17.2%. <br />11