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Memo - City Council 2014 Proposed Preliminary Budget and Tax Levy 4 TAKING A LOOK AT ARDEN HILLS LEVY HISTORY The State of Minnesota has granted local municipalities the authority to levy taxes to fund operations and debt payments. tax levy goes for General Fund expenditures. For the City of Arden Hills, the property tax levy accounts for approximately 78% of the General however, due to the current economic environment $41,201 was used to balance the budget for 2010 and $20,000 was used in 2011, no reserves were used in 2012, and $20,454 were used in 2013 and the proposed 2014 levy: %% YearTax LevyChangeTax RateChange 2002$ 2,201,002-25.092%- 2003$ 2,265,7122.94%23.930%-4.63% 2004$ 2,333,3372.98%23.367%-2.35% 2005$ 2,440,4534.59%21.299%-8.85% 2006$ 2,537,5203.98%20.191%-5.20% 2007$ 2,688,9445.97%20.206%0.07% 2008$ 2,797,3484.03%19.585%-3.07% 2009$ 2,948,6465.41%20.520%4.77% 2010$ 3,016,4652.30%22.647%10.37% 2011$ 3,040,9640.81%24.180%6.77% 2012$ 3,096,9941.84%25.544%5.64% 2013$ 3,191,2303.04%27.931%9.34% 2014$ 3,289,0273.06%28.248%1.13% 2009 saw the start of the LJFD duty crew implementation, while 2010 and 2011 saw the unallotment of the MVHC to cities. 2012 saw the reduction in tax capacity as a result of the market value exclusion (MVE). We have been very conservative in our budgeting and have reduced department budgets or used reserves to deal with the increased costs of our contracted services while still maintaining services the last few years. OPERATING BUDGET Salary and Benefits The 2014 preliminary budget was prepared assuming a 2% wage adjustment for non-union staff and a 1.5% wage adjustment for union staff. In surveying surrounding communities most have included a 2.0% - 3.0% COLA increase in their preliminary estimates. The results from the City Council authorized market and pay equity study should be available before the Council approves the final budget. Assumptions in this budget also include: eliminating the interns in the Finance and Administration Department and replacing them with a part-time support position; increasing the intern position in the Planning and Zoning Department from half-time to full-time; and adding an intern to the Engineering Budget. (It should be noted that most of engineering is allocated out to projects with some going to other departments.) The effects of these changes can be seen on the charts on the next page: