2F, Preliminary Budget Discussion

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lt EN HILLS MEMORANDUM DATE: May 21, 2012 TO: Honorable Mayor and City Council Patrick Klaers, City Administrator FROM: Sue Iverson, Director of Finance and Administrative Services SUBJECT: 201.3 Preliminary Budget Discussion Background: The City staff will begin the process of developing a Preliminary 2013 Budget. As we progress forward and take the necessary steps, staff needs general direction and guidance from the Council with regards to changes for the coming year. As of this time, we are not under levy limits for 2013. Discussion: Preliminarily, staff has identified a number of factors that will influence the 2013 Budget. Some are identified as follows: • Tax Levy — what is the Council's comfort level? Last year it was a 1.84% increase. A 1% levy increase translates to approximately $30,000. • Overall budget changes—preferences/limits? • Personnel— Staff does not see a change in personnel under current conditions. • Salaries and Benefits. The Council did a market study and updated our pay scales in December of 2007. We did not have a COLA increase in 2010 for non-union employees and the Council has given I% on January 1 of 2011, and I% on July 1 of 2011. The Council has given 1% as of January 1, 2012, and will consider an additional 1% effective July 1, 2012, at a later date (this is how the budget was prepared for 2012 and the discussion at the December 12, 2012, City Council meeting). The union employees did have a COLA increase of 3% for 2010, a 0% increase for 2011, and I% for 2012 per union contracts. Would the Council like staff to run various alternatives during the budget process this year?