1E - 2009 Budget Discussion - Laserfiche WebLink

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Memo 2009 Budget Memo 2 DISCUSSION: Preliminarily, staff has identified a number of factors that will influence the 2009 Budget. Some are identified as follows: . Tax Levy - what is the Council's comfort level? Last year was a 4.6% increase. Al % levy increase translates to approximately $25,000. Council may wish to consider a higher percent increase from prior years in the eyent there are levy limits. It may be more prudent to look at our tax rate instead ofthe levy. Excess funds can be contributed to contingency reserves, Parks, Public Safety Capital, or Utility Funds. . In talking with the financial advisors, staff, and looking at the current asset and equipment list, one of the areas which we need to address is setting up reserves for equipment replacement. Weare currently setting aside reserves for public safety equipment, but none has been set aside for public works equipment replacement, technology - such as computers, etc, Staff would recommend that we set up some funding source for reserves for equipment replacement and major building repairs. Council did authorize a new fund for this purpose last year and did authorize a transfer to this fund, but no dedicated fund sources have been established. . Another area where staff sees a need is in park funding, Park dedication fees are generally limited to capital improvements not general repair and maintenance items and they are not a steady stream of income. In looking at the [mancial plan, staff sees a need to set up a reserve for park improyements. This fund would then be a funding source for items which are included in the CIP. . Personnel- these issues will be addressed with the Council when we are further into the budget process. The new City Administrator will need time to evaluate the organization and propose any changes to the Council. . Oyerall budget increases - preferences/limits? . Salaries and Benefits. Last year, the Council authorized a market study which was implemented in December 2007. Future COLA increases will determine if we stay current with the market or fall behind. The union's labor agreement calls for a 3.0% in steps/COLA. · Increase in employee benefits costs (health and dental). We do not yet have preliminary numbers for these costs yet, but will be getting these in the next few months, Our insurance broker is going out to market to price rates and get quotes. We will compare this information to our current coverage and discuss with council at a future date, Until we get the actual numbers, a 15% increase will be used. The current City contribution towards health and dental is $648 per month. Over the past few years, the Council had approved budgeting for 50% of the increase in premium. In other words, the City equally shared the rate increase with the employees, Last year the Council approved budgeting for 50% of the increase, but also added an additional plan with a deductible at a lower cost (HSA). This plan was available to employees with the same City contribution as the co-pay plan, as they were taking on more of the risk, but participation in the plan would reduce city overall costs. Additionally, only those who took the new HSA plan are receiving the full City contribution ifthere is any remaining after health insurance premiums, this provided an incentive to employees to convert to the new plan. All but