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ARDEN HILLS CITY COUNCIL WORK SESSION — AUGUST 29, 2011 4 Councilmember Holden commented that the bottom line is that even with no levy increase, homeowners will be paying more in property taxes. Mayor Grant was concerned that homeowners would find it difficult to understand the process by which the new taxes have been determined. Director of Finance and Administrative Services Iverson pointed out that the figures she has included are tentative because the final rates are not set until January after the period for filing homestead exemptions has ended. Director of Finance and Administrative Services Iverson stated for salary and benefits the 2012 preliminary budget was prepared assuming a 1.5% wage adjustment for non -union staff (1.0% January 1 / 1.0% July 1) and a 1.0% wage adjustment for union staff effective January 1, based on contract negotiations. As previously discussed with the Council, in surveying surrounding communities most have included a 2.0% COLA increase in their preliminary estimates at this time. The budget also assumes a $21 per month increase in the City's contribution to health and dental insurance. The increase for 2012 is 3.6% for medical. In 2008, the City added a high - deductible HSA plan which has been helping to keep our costs low; in 2011 we saw a decrease of 13.1% so there was no increase in the City contribution in 2011. Dental has been estimated at 10% as we have not yet received the actual rates from the insurance carrier. Director of Finance and Administrative Services Iverson reviewed the Revenue estimates in the General Fund and pointed out the major differences listed on Page 6. She explained the Revenues are $20,000 higher than the expenditures because $20,000 was used from fund balance reserves to balance the budget last year. Councilmember Holden asked how much the City used from reserves the year before. Director of Finance and Administrative Services Iverson responded that the City had used $40,000 for a total of $60,000 from reserves in two years. She went on to explain the most notable difference in Revenues is that we no longer have to budget the negative amount for the homestead credit; an adjustment in the water tower rental amounts to reflect actual; the increases in program field uses has been included; and miscellaneous adjustments. Director of Finance and Administrative Services Iverson explained that in 2008 the EDA expenditures were moved from the EDA fund to the General Fund because of the negative balance in the EDA fund. The EDA excess TIF revenues are now projected to be $35,000 annually. She added that we had been making transfers from the General Fund to the EDA fund for the gateway signs but have never built the signs. So, the EDA fund balance by the end of this year is estimated to be approximately $115,000. Because we're starting to work on economic development again, we believe those expenditures should be moved back into the EDA funds. She also explained that the City has certain authority for use of EDA funds so she transferred out the same amount of salaries that used to be in the EDA fund and allocated its part of accounting costs, IT and insurance. In addition, the Community Development intern position was increased from a quarter time position to a half time position for the full year. She then reviewed the following increases: Public Safety - $58,820 for increases in the fire contract ($13,467, 3.55 %); Sheriff's contract ($33,966, 3.63 %); 911 Dispatch Services ($7,053, 16.73 %); and Animal Control ($4,334,