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REQUEST FOR COUNCIL ACTION Date: 05/13/2013 Item No.: 12.b Department Approval City Manager Approval Item Description: Receive Preliminary Report on the 2014 Budget & Tax Levy Impact Items B ACKGROUND 1 At the February 25, 2013 City Council meeting the Council adopted the 2014/2015 Budget Calendar 2 which outlined a series of steps to facilitate the eventual development of a budget. City Staff is in the 3 early stages of developing program cost estimates that will be used in the formulation of a City 4 Manager Recommended Budget. 5 6 Before continuing to the next stage of that process, Staff is seeking general guidance from the Council 7 on spending and tax levy target levels for the next biennium. To assist in that process, Staff has 8 prepared a summary of the major budget impact items that are expected in 2014 and 2015. Estimated 9 amounts for these items are presented below. 10 11 Major Budget Impacts: Property Tax-Supported Programs 12 13 2014 Budget Impact Item Description / Comments Amount Debt obligations Remaining portion of the Parks Renewal Bonds $ 560,000 Capital replacements Based on CIP Committee recommendations 315,000 Employee COLA Based on 2% cost-of-living-adjustment (COLA) 185,000 Employee wage step increases For eligible employees 100,000 Employee wage adjustments Based on Compensation Study 200,000 Employer PERA mandates Mandated contribution increase for Police, Fire 30,000 Employee Healthcare Mandate based on Affordable Care Act 75,000 General inflation Inflation on supplies, professional services, etc. 100,000 Total $ 1,565,000 14 It should be noted that the impact items listed for 2014 will be continued into 2015. 15 16 For 2014 the total projected budget and tax levy impact is $1,565,000, an increase of 9.1% over the 17 current tax levy. This will result in an estimated tax impact on a median single-family home of $94 18 annually or $7.80 per month. For comparison purposes, the tax levy increase in 2013 was 15.4%. 19 20 Page 1 of 2