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Page 1 of 4 AGENDA ITEM – 1C MEMORANDUM DATE: November 16, 2020 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Gayle Bauman, Finance Director SUBJECT: 2021 Proposed Budget and CIP Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Council Should Consider Staff is requesting City Council to review and provide feedback to the attached proposed 2021 Budget and CIP. The Truth-in-Taxation meeting is scheduled for December 14, 2020, where a final budget and tax levy will be adopted. Background A budget workshop was held with the Council on August 17, 2020. Staff was directed to reduce the proposed COLA for non-union employees from 3% to 2% and Council adopted a maximum tax levy increase of 4.25% on September 14, 2020. The final levy and budget adoption meeting is scheduled for December 14, 2020. Discussion Wages and Benefits The 2021 proposed budget is currently being prepared assuming a 2.0% wage adjustment for non- union staff; the IUOE Local 49 Union Contract was approved back in December 2019 at 3% for 2021. Benefit amounts have been adjusted based on renewal information. Health insurance is set to increase by about 9.5% and dental is set to remain the same as 2020. The city’s payment toward employee health insurance is increasing $43.48 per month for an employee on a single plan and $87.50 per month for an employee on a family plan. This is a $19,500 increase in the budget. Other changes to personnel costs include changes in the allocation between departments and funds for various positions. Total personnel costs increased by $152,090 from 2020 to 2021. The breakdown of this increase is as follows: 2020 IUOE Local 49 contract (approved after budget was adopted) $16,540 2021 Step increases $63,020 2021 COLA adjustments $52,470 Health insurance increase $19,500 Work Comp increase $560 TOTAL $152,090