2022-06-21 CC Packet - Laserfiche WebLink

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Memorandum Date: June 21, 2022 To: Honorable Mayor and City Council Members Through: Mark R. Statz, City Administrator/City Engineer From: Bruce DeJong, Finance Director Item: Preliminary Budget Discussion The Finance Director has prepared this preliminary budget projection with little input from other staff. This is a review based on analysis of the past three year’s of actual revenues and expenditures supplemented with some minor insight into the likelihood of changes for the following year. This rough estimate shows an increase of nearly $160,000 in the total tax levy. $128,000 is due to general fund budget changes and $32,000 is due to debt service levy changes. The largest single anticipated change is a decrease in Local Government Aid. With the changes in new commercial/industrial property in the city, We anticipate a significant loss of state aid in the amount of $40,000. This was originally supposed to take effect for 2022, but we received a one-year supplemental allocaton of $40,500. Staff has been in contact with LMC and MetroCities staff to better understand the changes, but this is likely to occur in 2023. The next large change is an anticipated 3% increase in employee wages and employee step increases. This flows through to increased FICA and PERA costs. This is combined with some adjustments to cost allocations totals $46,400 on a preliminary basis, but that is subject to further review with the City Administrator. The debt service increase is due to our refunding assuming all special assessments had been received already in our refunding debt service analysis. I have to put the full levy in from the bond documents, but staff can bring a resolution forward to a future City Council agenda to transfer the funds for the assessments on an annual basis to bring down that increase to what was anticipated prior to the refunding completed in 2021.