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Page 3 of 5 above, the City also expects to receive $225,000 in local government aid which will be earmarked for 84 capital replacements. 85 86 The Recommended Budget also relies on approxi mately $400,000 of General Fund cash reserves – 87 slightly less than the $430,000 figure referenced a month ago. The decline is somewhat due to refined 88 estimates of personnel-related costs that factors in recent employee tur nover. It also includes revised 89 estimates of the amount of savings being derived fr om the newly-imposed sales tax exemption and the 90 extent it will offset inflationary effects on genera l operating costs. 91 92 The use of reserves is necessary due to the impositio n of levy limits which will prevent us from setting 93 a tax levy that is sufficient to maintain programs a nd services. The use of cash reserves is warranted 94 given the importance of maintaining service levels and given the City’s strong financial condition. 95 However, the City should be prepared to eliminate the use of reserves for day-to -day operations in 2015 96 or 2016 in accordance with City Poli cy and industry recommended practices. 97 98 Finally, the Recommended Budget calls for a tax levy increase of $758,895 or 4.4% over the current 99 levy. Most of this increase is necessary to pay fo r the added debt service associated with the Parks 100 Renewal Program. The remaining $198,895 (1.4% incr ease over the current levy) represents the 101 maximum amount allowed in 2014 under levy li mits to meet day-to-day operations. 102 103 It is recommended that the $198,895 in new le vy dollars be allocated as follows: 104 105 106 Program Description Amount Compensation Study – 2.6% Adjustment to be implemented January 1 s t $ 104,565 Compensation Study – 2.0% Adjustment to be implemented July 1 s t 40,215 Park Maintenance Full-time Park Maintenance Operator position 60,000 Police Patrol Additional overtime 10,000 Police Community Services New Am erican outreach materials 1,000 N/A Unallocated 3,115 Total $ 198,895 107 108 The Council is strongly encouraged to levy the maximu m amount to preserve the City’s levy limit base 109 moving forward. Based on prior legi slative actions, it is conceivable that foregoing available levy in 110 2014 could result in the City losing th at availability in future years if the legislatur e decides to ‘re-set’ 111 cities’ base amounts to the amount levied in 2014. 112 113 Tax Levy and Impact on Homeowners 114 A summary of the tax levy impact on homeowner s based on the Recommended Budget is presented 115 below. 116 117 In an effort to provide added insight not only on the 2014 Budget but also future budgets, a 7-year 118 projection of the tax levy is shown below. The 7-y ear period coincides with the same period referenced 119 in the recommendations set for the by the City Council and CIP/Budget Committee. 120 121