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'It <br />,ARZEN HILLS <br />MEMORANDUM <br />DATE: December 12, 2022 <br />TO: Honorable Mayor and City Councilmembers <br />Dave Perrault, City Administrator <br />FROM: Gayle Bauman, Finance Director <br />SUBJECT: 2023 Tax Levy and Budget <br />Budgeted Amount: Actual Amount: <br />N/A N/A <br />Council Should Consider <br />NEW BUSINESS —10A <br />Funding Source: <br />N/A <br />Motion to approve, table or deny the following: <br />• Resolution 2022-056 Setting the Final Levy for Taxes Payable in 2023 <br />• Resolution 2022-057 Adopting the 2023 Budget <br />All items need a simple majority for action unless otherwise noted. <br />Background <br />A budget workshop was held with the Council on August 15, 2022. Staff was directed to provide <br />proposed maximum levy increase options from 4% to 7%, and Council adopted a maximum tax <br />levy increase of 7.0% on September 26, 2022. Another budget workshop was held with the Council <br />on November 21, 2022. <br />Discussion <br />Wages and Benefits <br />The 2023 proposed budget is currently being prepared assuming a 3.0% wage adjustment for non -union <br />and union staff. There was a survey completed of neighboring communities and many are at 3.5% or <br />higher. It is important for the City to remain competitive in the marketplace. The number of positions <br />included in the budget is remaining the same. There are changes to some of the wage allocations, the <br />City Planner was promoted to the Community Development Director and the City Clerk was promoted <br />to the Assistant to the City Administrator. <br />Benefit amounts have been adjusted based on renewal information. The City is switching health <br />insurance plans in 2023 because of the big increase being proposed by PEIP. Overall, the city cost for <br />insurance is increasing $48,820 or 17.1%. <br />Total personnel costs increased by $187,700 from 2022 to 2023. The breakdown of this increase is as <br />follows: <br />Page 1 of 5 <br />