2019-03-27 CC Packet - Laserfiche WebLink

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Page 3 can increased to strain city resources were: employee wages/salaries, 86 percent(84 percent last year); prices and inflation, 80 percent(81 percent last year); infrastructure needs, 75 percent(75 percent last year); cost of employee benefits, 61 percent(67 percent last year); and public safety needs, 53 percent(47 percent last year). In the NLC study, employee wages,public safety and infrastructure were the three most common areas of reported budget pressures. Comments from cities: -The significant increase in infrastructure spending relates primarily to a 3-year railroad underpass project (city of 43,400) -We are still in negotiations for the union contract so no wage increase yet but do anticipate one. Doing a wage study so could go either way at this point but suspect will be similar to Cities in area and...could be a significant increase and hit to the budget(city of 475) As far as factors that can improve a city's financial circumstances, 74 percent of cities saw increases in their city tax base over the last year. In 2017, 71 percent reported increases. Slightly more than a third said their local economy had improved. About half said their local economy was stable. Look by city size: • Small cities were much less likely to report an increase in the value of their tax base (59 percent compared to 74 percent of all cities). 0 85 percent of large cities reported an increase in the cost of employee healthcare, compared to 47 percent of small cities. 0 Small and large cities reported increases in infrastructure needs at similar rates (71 percent and 81 percent,respectively). • Large cities were more likely to see growing costs of employee pensions (70 percent compared to 51 percent overall). • Large cities reported increasing health of their local economies more than twice as often as small cities. Budget actions The most common budget strategies employed by Minnesota cities in 2018 for 2019 were changes in taxes, fees/charges, operating spending, infrastructure spending, and public safety spending. • 73 percent of cities reported increasing their taxes (slightly up from last year). • 56 percent of cities plan to spend more on public safety (down from 66 percent last year). • 61 percent of cities will increase their infrastructure spending (up from 57 percent last year). 0 51 percent of cities will grow their rate of operating spending in the next year(slight decrease from last year). 0 26 percent of cities will increase their use of reserves. This is unchanged from last year. Other strategies, such as service cutbacks or workforce reductions, were not common and only used by a handful of cities. Just like last year, these kinds of service or staff cuts were down quite a bit from the peak of the 2008 recession and Local Government Aid(LGA) cuts, when many cities had to make those painful choices. 99