CCP 07-17-2006 - Laserfiche WebLink

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. . . ~ ~~HlLLS MEMORANDUM DATE: TO: July 12, 2006 Honorable Mayor and City Council Agenda Item 2.C ~~S FROM: Murtuza Siddiqui, Chief Financial Officer/Treasurer SUBJECT: 2007 Preliminary Budget Discussion BACKGROUND: Thc City staff is in the process of developing a Preliminary 2007 Budget. As we progress forward and take the necessary steps, staff needs general direction and guidance from the Council with regards to changes for the coming year. Once again, there are no Icvy limits for 2007. The City is not under any legislative restrictions with regards to establishing a levy. As you may recall, there were no levy limits for 2005 and 2006. A number of Ramsey County cities opted for double digit increases. A number of cities took advantage ofthe "no levy limit" to make up for the loss of LGA and to undertake new projects. The City Council was prudent and limited the levy increase to 4% from prior years as they established levies for 2005 and 2006. Last year during the legislative session, there was discussion about "Turbo Tax" that would have restricted the cities from increasing the levy amount from prior year. Ifthis was to become law, cities would not have been able to increase the levy, unless a vote was taken. Fortunately, this discussion did not re-appear this year. DISCUSSION: Preliminarily, staff has identified a number offactors that will influence the 2007 Budget. Some are identified as follows: · Tax Levy - what is the Council's comfort level? Last year was a 4% increase, A 1% levy increase translates to approximately $25,000. Council may wish to consider a higher percent increase from prior years so that the excess amount can be contributed to Parks, Public Safety Capital, or Utility Funds. · Overall budget increases - preferences/limits? · Salaries and Benefits. Last year, the Council authorized a 2.75% increase for steps/COLA increases. This was the rate increase agreed by the labor union for 2006. In order to be