08-21-23-WS - Laserfiche WebLink

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Page 1 of 4 AGENDA ITEM – 3E MEMORANDUM DATE: August 21, 2023 TO: Honorable Mayor and City Councilmembers Dave Perrault, City Administrator FROM: Gayle Bauman, Finance Director SUBJECT: Preliminary General Fund Budget 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 preliminary General Fund budget for the 2024 fiscal year. Background Annually, City staff prepares and submits a preliminary budget to the City Council for review and feedback. Attached to this memo is the City’s preliminary General Fund budget for the 2024 fiscal year. Each department provided their respective forecasts for this budget. The proposed 2024 budget is $6,226,460, an increase of $696,280 or 12.6%. For the purpose of this discussion, there is a 13.2% ($621,270) tax levy increase reflected in the budget, all for the General Fund. As presented, the General Fund Budget is underfunded by $218,260 ($160,760 + $57,500), which is more than the budget shortfall projected in the 2023 budget of $160,760. This practice is not sustainable in the long term. Direction given at the July 2023 work session was to apply $57,500 of the 2022 fund balance to some one time operational expenditures included in the 2024 Budget ($40,000 for ordinance updates and $17,500 for a comp study). This would cause the 2024 Budget to be underfunded by a minimum of $57,500. A tax levy increase of 16.6% ($782,030) would be needed to balance the budget in 2024. The table below shows the amount the General Fund Budget is underfunded at different tax levy increase amounts, not including the $57,500 which is being covered by 2022 fund balance. Tax Levy Increase Underfunded Amount 5% $546,100 10% $310,160 13.2% $160,760 16.6% $0 The preliminary 2024 property value data has not yet been provided by Ramsey County so no projections can be made on our local tax rate.