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<br />Memo
<br />2006 Preliminary Budget Memo
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<br />significantly, primarily due to the situation at Guidant where we are not seeing any building
<br />activity since they were acquired by another company. We expect a revenue shortfall of about
<br />$125,000 in this area which impacts the general fund, In addition, we are anticipating lower
<br />collection in property tax collection compared to the budgeted amount. I estimate this to be
<br />around $25,000 for the year. This also impacts the general fund. Therefore, in total we
<br />anticipate the revenue collection to be under budget by approximately $150,000 for 2005. We
<br />can anticipate similar amount for 2006.
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<br />Staff, along with direction from the Council, has identified a number of factors that will
<br />influence the 2006 Budget. Some are identified as follows:
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<br />· Tax Levy - consider a 4% increase, This translates into a $97,067 increase from 2005,
<br />A 3% increase means $72,800. The City has to establish and certify a preliminary levy to
<br />Ramsey County by September 15, 2005. A final levy is established and certified in
<br />December. Please keep in mind that once a preliminary levy is established, the amount
<br />can be reduced, but it cannot be increased.
<br />· Overall budget to be based on needs. As a general guideline, increases are to be limited
<br />to the amount of inflation.
<br />· Employee Salaries - Employee step/COLA to be adjusted/increased by 2.75%, For 2005,
<br />as well as the past few years, a 3% increase was budgeted.
<br />· Council Members' and Mayor's compensation, The current compensation for the Mayor
<br />is $3,600 per year. The current compensation for the Council Members is $3,200 per .
<br />year. These amounts have remained unchanged since tbe early to mid nineties. Using
<br />the inflationary index, the salary for Mayor for 2006 may be adjusted to $4,800 per year
<br />and the Council Members' may be adjusted to $4,300, A 2005 Elected Officials Salary
<br />Survey is attached for revicw and discussion.
<br />· Increase in employee benefits costs (health and dental), Staff is conservatively
<br />estimating that the premiums will increase by about fifteen (15) percent. We may get a
<br />better handle over the next two months, The current City contribution towards health and
<br />dental is $533 per month, Over the past few years Council has approved budgeting for
<br />50% of the increase in premium, At the June 20, 2005 Work Session was comfortable
<br />with this mcthodology. Staff estimates that the total premiums will increase by about
<br />$134 per month, Using this amount and the sharing formula, the City's contribution to
<br />the employee towards the premiums will increase to $600 per month,
<br />· Set aside $15,000 - $20,000 to hire consultant and or temporary stafffor programming
<br />and internal controls, This will enable the City to automate reporting, In addition to
<br />automation, assistance will be needed in enhancing internal controls and improved
<br />documentation,
<br />. Update the 5 year CIP (see separate discussion memorandum),
<br />. Hardware Upgrades - $8,700, This includes two replacement computers for the Cable
<br />Room ($1,600); two replacement laser printers ($5,000); one replacement laptop for the
<br />City Administrator ($1 ,500); and one replacement digital camera ($600),
<br />· Document Imaging - Budgeted $36,800 in 2005, May not be able to implement in 2005,
<br />Need to carry-over this amount in 2006. .
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