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<br />TO: Fellow Council Members <br />FROM: Amy Ihlan <br />RE: Budget Adjustments <br /> <br />The following explains how we could adjust the city manager's proposed <br />budget to require no more than a 5% levy increase for 2006. Further <br />reductions may be possible, but my purpose is to show that a not-to-exceed <br />5% levy increase is feasible. <br /> <br />I used Neal's 5% levy increase spreadsheet as the basis for my calculations. <br />The attached shows how I would adjust the budget to achieve a 5% levy <br />increase while still maintaining services and allowing for cost ofliving <br />increases in salaries and health care benefits. <br /> <br />New Obligations <br /> <br />I think we should look for non-levy sources to fund the following items in <br />the new obligations column: <br /> <br />Police 800mhz radio maintenance costs <br />Fire 800mhz radio maintenance costs <br /> <br />8,000 <br />3,000 <br /> <br />If funds to cover these costs can't be found in the police and fire budgets, I <br />would favor drawing on reserves on a one-time basis to establish a 800 mhz <br />maintenance fund, sufficient to cover maintenance for the next 2 or 3 years, <br />to allow time to establish new funding sources or phase contI'ibutions to the <br />maintenance fund into the levy. <br /> <br />County Road C StTeetscapes <br /> <br />25,000 <br /> <br />I would look for a way to pay for these costs without using the levy, from <br />existing public works funds. <br /> <br />I have removed these "new obligations" from my adjusted spreadsheet. I am <br />also removing the increased audit and legal costs, since we have not had bids <br />on these contracts yet and should not assume that we will need to increase <br />costs until we see what bids come in. If it is necessary to pay more, these <br />amounts would be small enough to draw from the contingency fund. <br />