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Memo 2006 Preliminary Budget Memo 2 December. Please keep in mind that once a preliminary levy is established,the amount can be reduced, but it cannot be increased. • Overall, the preliminary budget was prepared based on needs,while taking into account the new revenue stream. As a general guideline, increases are limited to the amount of inflation. • Employee Salaries-Employee step/COLA increased by 2.75% as previously discussed by the Council. • Increase in employee benefits costs (health and dental). Based on the recent information available from our brokers, a ten(10)percent increase has been budgeted. The current City contribution towards health and dental is$533 per month. Over the past few years Council has approved budgeting for 50%of the increase in premium. At the June 20, 2005 Work Session,the Council was comfortable with this methodology. Staff estimates that the total premiums will increase by about $105 per month. Using this amount and the sharing formula,the City's contribution to the employee towards the premiums will increase to $586 per month. • $10,000 has been budgeted to hire consultant and or temporary staff for programming internal controls. This will enable the City to automate reporting. In addition to automation, assistance will be needed in enhancing internal controls and improved documentation. • Preliminary CIP numbers have been included in the budget. This includes: Ridgewood Neighborhood- $1,764,000;reconstruction of lift stations 1, 11, 12, & 13 - $560,000; replace one Toro ground master mower- $30,000; and Tony Schmidt Park Underpass- $32,000; Monument signage - $30,000. • Technology Upgrades- $22,600. This includes two replacement computers for the Cable Room - $1,600; one replacement laptop for the City Administrator- $1,500; one Canon G6 replacement digital camera$500; Speed Board - $4,000; Security upgrades- $7,500; Webfiche - $7,500. • Document Imaging—Budgeted $36,800 in 2005. Given the current staffing situation,we may not be able to implement it in 2005. Need to carry-over this amount in 2006. A budget amendment will occur in the early part of 2006. The preliminary 2006 Budget does not include any funds for the implementation. • Fire capital upgrades- $27,123. This includes sealcoating the parking lot and replacing the squad room furniture at Arden Hills Station,totaling$13,500. In addition to the specific items for the Arden Hills Station, the shared portion of acquiring equipment is $13,623. • Fuel, electric, and gas costs have been budgeted according to current and anticipated increased costs at 40%. The increase in the cost for police services is driven by some key issues as outlined below: • Proposed addition of a second Traffic Deputy(5/1/06 start date)AH share is 10% • 2% Salary Increase • PERA increase for Police and fire from 9:3%to 10.5% • Insurance Benefit Increases '�