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Page 5 of 12 <br /> <br />The table below shows the amount the General Fund Budget is underfunded at different tax levy <br />increase amounts. <br /> <br />Tax Levy Increase Underfunded Amount <br />5% $726,711 <br />10% $425,310 <br />13% $244,470 <br />15.0% $122,009 <br />17.1% $0 <br /> <br />Wages and Benefits <br />The 2026 preliminary budget is currently being prepared which assumes a 3.0% wage adjustment <br />for all staff. Below is a table showing the recent history of approved COLA’s. <br /> <br />Year Non Union IUOE Union <br />2025 3.00% + addition of P&R Mgr 7.00% + 2 PW Lead Promotions <br />2024 3.00% 3.00% <br />2023 3.00% 3.00% <br />2022 3.00% 3.00% + addition of Fleet Lead <br />2021 2.00% 3.00% <br />2020 3.00% Market Adjustment; Minimum increase was 5.80% <br />2019 2.50% 2.50% <br />2018 2.10% 2.25% <br /> <br />In 2025, the City hired David Drown and Associates (DDA) to conduct a comprehensive study of <br />its compensation and classification structure. As a result of their work, changes were made to the <br />City’s wage schedule, and several non-union employees received job reclassifications. These <br />changes maintain the City’s competitiveness in the marketplace, putting the City at a 108% market <br />value or 8% above market value. Additionally, union employees negotiated a new three -year <br />contract. <br /> <br />There is a 15.0% increase assumed for health, a 4.0% increase for dental, a 0.0% increase for life <br />insurance premiums, and a $15,000 placeholder for the City’s share to implement the MN Paid <br />Family Leave required per State legislation for every employer. The number of positions included <br />in the budget increased by 1.0 full-time equivalent (FTE) relative to 2025 based upon Phase 2 of <br />the proposed Public Works organizational structure and staffing changes. <br /> <br />Public Safety <br />2026 budget information was received from Ramsey County and the Lake Johanna Fire Department <br />for public safety. <br /> <br />POLICE. The police contract is expected to increase by 13.2% or $231,220 for 2026. <br />DISPATCH. Dispatch costs will increase by 17.4% or $12,780 for 2026. <br />FIRE. The fire operating costs are expected to rise by 17.6% or $159,231 for 2026. <br /> <br />Please note, the SAFER grant will discontinue starting in 2027 and contract cities will need to fund <br />the new positions. In 2024, the City decided to raise the levy in the Public Safety Capital Equipment <br />Fund each year to build up a reserve for this (see chart below), in order to lower the impact of the <br />annual levy increases. The annual levy increase for the first 4 years would be set at $40,000 and <br />increase to $58,284 in 2030, then taper down starting in 2031. <br />