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<br />. <br /> <br />~ <br />~HlLLS <br /> <br />MEMORANDUM <br /> <br />DATE: <br /> <br />June 5, 2003 <br /> <br />Agenda Item 8. C <br /> <br />TO: <br /> <br />Mayor Beverly Aplikowski <br />Council Member David Grant <br />Council Member Brenda Holden <br />Council Member Gregg Larson <br />Council Member Lois Rem <br /> <br />FROM: <br /> <br />Aaron Parrish, Interim City Administrator I Community Services Director <br /> <br />fif <br /> <br />SUBJECT: <br /> <br />2004 Budget Process and Council Priorities <br /> <br />Overview <br /> <br />. <br /> <br />With the conclusion of the legislative session, staff wanted to take the opportunity to update the <br />Council on the potential impacts to the 2004 budget. In particular, the Council will note the <br />following: <br /> <br />1. All of the city's local government aid and market value homestead credit have been <br />eliminated for 2003 and 2004. This translates into approximately $120,000. As Council <br />may recall, in anticipation of these cuts, a 50% cut in aid was factored into the 2003 <br />budget. It is anticipated that deferred capital improvements, higher than anticipated <br />building permit revenues, lower than anticipated bids on CIP projects, and staff vacancies <br />will compensate for the additional reduction in 2003. <br /> <br />2. As part of the overall budget compromise, a different form of levy limits has been <br />enacted for 2004. Previously, levy limits took into account economic and growth factors. <br />For 2004, communities will be limited to levying up to 60% of its lost state aids. This <br />translates into a maximum potential levy increase of approximately 1 %, or $72,000. In <br />recent years, we have had levy increases anywhere from 3-8 percent. <br /> <br />Needless to say, in light of the levy limit situation and increasing costs, this years budgeting <br />process will be challenging but manageable. <br /> <br />Staff is in the process of compiling preliminary operating and capital budgets. A draft should be <br />available for the Council sometime in late June or early July. <br /> <br />e ReQnested Action <br /> <br />Provided for informational purposes <br />