CCP 11-15-2004 - Laserfiche WebLink

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.. - - - . ~ ~ILLS 1245 West Highway 96 Arden Hills, Minnesota 55112 2005 BUDGET MESSAGE Dear Residents of Arden Hills: We are pleased to present to you the City's 2005 Proposed Budget. The budget development process started in the third week of June, with both the City Council and staff working jointly. At the June 21,2004 Council Work Session, staff provided an overview of the financial structure and requested from the Council a general guidance to proceed with the budget. At this meeting, there was considerable discussion about the levy amount along with a discussion about the anticipated increase in health and dental premiums. The City will face a twenty percent increase in insurance premIUms. With regards to the levy, thc State Legislature eliminated a levy limit for certification year 2004 (2005 Budget year). The City Council was not comfortable with increasing the levy amount by an amount which would be far greater than the past increases. After considerable discussion, a decision was reached to limit the levy increase in the range of three to four percent. Staff was requested to prcpare a preliminary budget taking the usual conservative approach to budgeting and spending. At the August 16,2004 Work Session, Michelle Wolfe and Murtuza Siddiqui presented a 2005 Preliminary Budget. Staff mentioned that based on the direction provided at the August 16th meeting, the budget will be adjusted accordingly over the next two to three months, prior to its finalization. At this meeting, there was also a consensus to certify a preliminary tax levy of 4%, with an understanding that the final certification may change. As part of this budgeting process, staff and the Council also worked on a Five Year Capital Improvement Plan (CIP), establishing priorities, based on the needs and availability of funds. The Council had numerous mcetings with staff and the City Engineer to discuss and establish priorities, based on the needs, for the next five years. Also as part of this budgeting process, the City looked at its utility rates. Staff indicated that the current utility rate structure will not be able support the planned CIP activities and will be faced with a deficit in the utility funds, starting as early as two years. It was indicated that the City has not increased the water rates since 1999 and the sewer and surface water rates since 2001. Based on this review, the City hired a consultant to