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Page 1 of 5 NEW BUSINESS – 9C MEMORANDUM DATE: December 14, 2020 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Gayle Bauman, Finance Director SUBJECT: 2021 Budget and Tax Levy Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Council Should Consider The City Council should consider approving the 2021 Budget and Tax Levy as presented, or provide changes to the budget and/or levy to be effective in 2021. 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. Another budget workshop was held with the Council on November 16, 2020. Staff was not directed to make any changes to the proposed information. 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. Health Insurance 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