06-20-05 - Laserfiche WebLink

Home Browse Search

. . . ~ ~HILLS MEMORANDUM DATE: June 15, 2005 Agenda Item 2.E TO: Honorable Mayor and City Council FROM: Murtuza Siddiqui, Finance Director/Treasurer "Y'ilS SUBJECT: Preliminary 2006 Budget Discussion BACKGROUND: The City staff is in the process of developing a Preliminary 2006 Budget. As we progress forward and take the next steps, staff needs general direction and guidance from the Council with regards to changes for the coming year. Goals and objectives that were discussed previously at the various Council meetings are to be incorporated in this budget. Last year, the Legislature eliminated levy limits; therefore, the City was not under any legislative restrictions with regards to establishing a levy. A number of cities used this "no limit" opportunity to set a high levy. The average levy increase for Ramsey County cities was slightly under 8%. The City Council was very prudent and voted to limit the levy increase to 4% from pnor year. DISCUSSION: As of the middle of June this year, the State Legislature is still in session and no decisions have been reached regarding the levy. Earlier during their session, a bill was introduced - "Turbo Tax" that would restrict the cities from increasing the levy amount from prior year. Ifthis becomes law, the City would not be able to increase the levy, unless a vote is taken. Historically, the City limited the annual levy increases to about 3%. Staff, along with direction from the Council, has identified a number of factors that will influence the 2006 Budget. Some are identified as follows: · Tax Levy - Consider a 3% increase, but be prepared to scale back. . Overall budget increases? · Salaries and Benefits. Employee step/COLA increases. For the past few years, a 3% increase was budgeted.