2.B, 2011 Preliminary Budget Discussion

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H EN ILLS MEMORANDUM DATE: June 21, 2010 Item 2.B TO: Honorable Mayor and City Council FROM: Sue Iverson, Finance Director/Treasurer SUBJECT: 2011 Preliminary Budget Discussion BACKGROUND: The City staff is in the process of developing a Preliminary 2011 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. As of this time, we are under levy limits for 2011. The Implicit price deflator (IPD) cannot be below zero. Current estimates are at 1.68%. The Minnesota Department of Revenue sets this in early July, so we do not have the actual number yet. We did not levy to our full maximum last year when we take into account special levies, I will have an estimate of what amount we could be looking at for the worksession on Monday evening. DISCUSSION: Preliminarily, staff has identified a number of factors that will influence the 2011 Budget. Some are identified as follows: • Tax Levy—what is the Council's comfort level? Last year was a 2.3% increase. A 1% levy increase translates to approximately$25,000. • 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 financial plan, staff sees a need to set up a reserve for park improvements. This fund would then be a funding source for items which are included in the CIP. • Personnel—Council and staff have been discussing these issues over past few months and we are in the process of hiring a public works maintenance worker and a public work director. We have contracted for more engineering hours with Roseville and anticipate that we will reevaluate this once the Public Works department is fully staffed. • Overall budget increases—preferences/limits?