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HomeMy WebLinkAbout1.C 2010 Budget Preliminary Overview--AI�EN HILLS MEMORANDUM DATE: August 13, 2009 Item LC TO: Mayor and Council Members FROM: Ron Moorse, City Administrator Sue Iverson, Finance Director/Treasurer SUBJECT: 2010 Budget Preliminary Overview The proposed 2010 operating budget reflects an effort to manage expenditures in a way that maintains current municipal service levels while reflecting the current fiscal environment, including the general economic conditions and the State budget deficit. General Fund Budget General Fund Expenditures The proposed 2010 General Fund expenditures arc $3,901,506. This is an increase of $75,534, or 1.97 % over the 2009 amended budget. (No contingency has been included in this budget). Based on the overall levy limit the Council does have an additional $61,764 that it could levy if it so chooses. The General Fund budget reflects an effort to limit discretionary expenditures in all areas. Numerous expenditure items are at a zero increase. The budget reflects no adjustment to the pay schedule for non -union staff. (There is a contract in place for the Public Works staff that provides for a 3% cost of living adjustment for 2010). The key expenditure items affecting the General Fund budget are listed below. In addition, there are two areas of expenditure increase that relate to necessary amendments to the 2009 budget. One is an amendment to the contract policing budget in the amount of $44,000. The second amendment is related to the contracted fire service budget in the amount of $13,348. A memo from the Finance Director providing additional information regarding the budget amendments is attached. An additional expenditure item that requires discussion is funding for TCAAP-related consultant and legal services. While it is not clear what the amount of TCAAP-related expenditures may Memo City Council 2010 Budget Preliminary Overview Page 2 be, there is a continuing expenditure amount in the Planning budget for consulting services in the amount of $66,000. This amount is currently related to consultant services required for a small area plan process for the Red Fox/Grey Fox area. All or a portion of these funds could be used for TCAAP-related expenses, depending on the priority the Council places on moving forward with the Red Fox/Grey Fox area plan in 2010. A summary of the major items causing the General Fund expenditure increase is as follows: Annual pay adjustments: (The proposed budget reflects a 0% increase $1,822 in pay schedules for non -union and 3% for union employees). The annual pay adjustments include scheduled pay steps. (Due to salary allocation changes, the impact on the general fund was minimal.) Group Insurance contribution increase: The proposed expenditures $4,460 reflect a $45.50 per month increase in the City's contribution toward employee health insurance and other benefit options in the cafeteria benefit plan. ($717.50 per month, per employee) Increased costs for Recording Secretary $5,000 Increased budgeted contribution for NYFS by $5,000. (Currently have $5,000 been budgeting a $4,000 contribution and $1,000 for annual luncheon.) Newsletter "Arden Notes" increased costs have not been finalized at $5,000 this point. The budget currently reflects an increase of $5,000. Elections increased as there were no elections in 2009. $11,590 Contract Policing costs have increased 1.06% over 2009. $9,556 Contracted Fire Service costs: The budget reflects a 5.6% increase in $18,905 costs for contracted fire service. This increase is due mainly to funding for a full year of the Assistant Fire Chief position, and the first year of the phase -in of the duty crew staffing plan. 911 Dispatch costs have increased 17.35%. There was no increase in $5,325 these services for 2009. Property and Liability insurance increased as a result of previous $8,920 claims (mainly due to Clear Channel) Increase intern hours in the Finance and Support Services department. $6,000 General Fund Revenue Highlights General Fund revenues are generally flat, particularly construction -related revenues. The key item affecting revenues is the elimination of the Market Value Homestead Credit (MVHC) revenue through the Governor's unallotment process. The amount that will be unalloted in 2010 is $61,774. Memo City Council 2010 Budget Preliminary Overview Page 3 Tax Levy, Levy Limit and by act on Property Owners The proposed 2010 budget reflects a levy of $3,090,471 or a 4.8% levy increase over 2009. Without the loss of the MVHC revenue, the levy increase would be 2.7%. The City has not yet received communication from the Department of Revenue on an initial overall levy limit, as per statute this is not due to cities until September 1, 2009. Staff has estimated the allowable levy limit for the City of Arden Hills based on instructions received from the League of Minnesota Cities which incorporates any law changes. The overall estimated levy limit is $3,152,235. We have not yet received all the information from Ramsey County to calculate the tax rate or impacts to property owners, but staff has completed estimates based on last year's values. The proposed budget equates to a $581.88 tax bill per year on an average value residential property based on Pay 2009 values. This is a $30.38 increase from 2009. Of this increase, $13.24 is due to the loss of MVHC revenue. Actual data will be available in the next week from Ramsey County in time to set the Preliminary Levy. , mt QEN HILLS MEMORANDUM DATE: August 13, 2009 TO: Honorable Mayor and City Council Ron Moorse, City Administrator FROM: Sue Iverson, Finance Director SUBJECT: 2009 Budget Adjustments Background/Discussion: During the 2009 budget process, the Council did not support the Assistant Fire Chief position in the Lake Johanna Fire Department budget. As a result, we did not budget for this position. Subsequently, it was decided by the fire board to leave this amount in the budget and it has become part of our contract amount for 2009. A budget amendment will be needed to increase the Fire contract line item by $13,348. During the 2009 budget process, the $44,000 revenue in Police Aid was double counted in the final budget. It was correctly recorded in the Intergovernmental Revenues, but was also found to be "netted" against expenditures, resulting in the Contract Policing line item being $44,000 to low. A budget amendment is needed to increase the Contract Policing line item by $44,000. These items will be brought forward to the next City Council meeting to be approved by the City Council. In the preparation of the 2010 Budget, they have been incorporated in the Amended Budget.