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17 MEMORANDUM DATE: August 14, 2009 TO: Mayor and Councilmembers FROM: Mike Morrison, City Manager Roger Larson, Finance Director ITEM: PROPOSED 2010 OPERATING BUDGET Overview: Staff has finalized a proposed 2010 Operating Budget totaling $5,283,400. This represents a$58,700 dollar increase= 1.12%. The budget was prepared using the following criteria: 1) 0% increase in salaries for 2010. A. 3 - Union contracts expire 12/31/09. 2) Health insurance premiums: A. Employer health insurance contribution for family coverage is increased by $100.00. a. The employee increase is estimated at $117.00. B. 2010 Estimated Percentage Employer/Employee a. City pays 53.7% b. Employee Pays 46.3% C. 2009 Estimate — Employer/Employee a. City pays — 55.3% b. Employee pays 44.7% D. Metro Cities Average: a. Employer — 62.1 % b. Employee — 37.9% As directed by the City Council, restructuring of the 2010 Budget was done to adjust the budgeted expenditures closer to actual costs. The proposed 2010 operating budget includes a general fund levy of $2,945,511 which is the same as the 2009 levy representing a 0% increase. Levy limits continue in 2010. Since the proposed 2010 levy is the same as the 2009 levy, the amount of the levy will be less than the levy limit allowed by the Minnesota Department of Revenue. Their calculation will include adjustments for inflation, increased household growth and new commercial/industrial taxable market value. It is anticipated that the City will receive its final levy notification on or before September 1st. The proposed 2010 capital equipment budget totals $313,200 and moving forward will be the amount of the annual funding available for capital equipment purchases. This budget was reduced a total of $86,800 from previous years by eliminating or deferring purchases to future years.