2F, Preliminary Budget Discussion

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Memo 2012 Budget Memo 2 • Increase in employee benefits costs (health and dental). We do not have preliminary numbers for these costs yet, but will be getting these in the next few months. Our insurance pool went out for bids on rates in 2009 for 2010 and we received a I% increase in 2009, a 13% decrease in 2010, and a 3.6% increase in 2011, which was the lowest they could give us by law. We did go out for various bids with other firms in 2009 and we did not experience favorable rates. Staff recommends staying with the current insurance provider at this time. Until we get the actual numbers, a 15% increase will be used. The current City contribution towards health and dental is $697.42 per month, but we are supplementing some of that from the dividends we have been receiving from the Co-op to keep the cost to the budget even with 2010. Over the past few years, the Council had approved budgeting for 50% of the increase in premium. In other words, the City equally shared the rate increase with the employees. Staff would recommend to continue to use this formula for budget purposes. • Update the five year CIP. Staff is currently in the process of updating the current plan to discuss with the City Council at the June work session. Does the City Council have any feedback or direction they would like to provide staff with respect to the CIP? • An area where staff sees a need is in park funding. Park dedication fees are generally limited to capital improvements, not general repair and maintenance items, and there is not a steady stream of income. In looking at the financial plan, staff sees a need to set up a reserve for park improvements. This fund would then be a funding source for items which are included in the CIP. • As a step in creating a quality budget document, performance measures/service indicators need to be established for each department. Some of these may come about as a result of the community survey (if one is done) as areas that the Council would like to improve. Goals and objectives also need to be established for each department. These would need to be established in 2013, then in subsequent years actual performance can be tracked to show progress against these goals. This would provide Council and the public another tool to evaluate city services. Staff would appreciate input from the Council on this matter. Recommended Action: Staff is seeking direction from the Council as it continues with the 2013 Budgeting process.