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26 * * Note, Merit Pay of $30,000 shown in the above table was temporarily suspended pending Council 27 approval of a new Merit Pay Plan Policy, but can be funded out of contingency funds set aside in the 2R annual General Fund budget. 29 3U 2014 Cash Reserve Funded Increases 31 Description Amount 2% Employee cost -of- living adjustment $ 1651000 Employee wage step increases 801000 Employee Healthcare 501000 PERA increase mandate 301000 Dispatching 651000 General Inflation 471000 Reduction from sales tax exemption (40,000) Reduced City Contribution to Fire Relief per actuarial study (80,000) Total $3179000 32 33 The City Council has also expressed a desire to fund a new Volunteer Coordinator position. If the 34 Council decides to do this, we will need to make sure it is appropriated somewhere in the budget along 35 with a funding source — which could simply be the use of Cash Reserves for 2014. We could not 36 however increase the 2014 tax levy as it is already statutorily capped at the preliminary levy set back in 3, September. 38 39 The City Manager Recommended Budget for the non tax - supported programs as recently adjusted is 40 $27,627,165, an increase of $3,973,197 or 16.8 %. This is $55,000 less than the original Recommended 41 Budget for these programs which is no longer needed to implement the results from the Compensation 42 Study. The overall Budget increase is due to higher planned capital outlays ($1.5 million), tax 43 increment financing activities ($1.7 million), and added costs associated with the purchase of water 44 from the City of St. Paul and wastewater treatment charges from the Met Council. 45 46 It also includes additional funding to add two new positions in the Information Technology division 47 which are being funded primarily from other governmental agencies that have partnered with the City. 48 49 2014 Recommended Budget Funding Sources 50 In the General Fund, non -tax revenues are expected to remain stagnant overall for 2014. Increases in 51 business licenses, permit fees, and court fines will be offset by a decline in interest earnings. The Parks 52 & Recreation Fund is expected to fare slightly better with program fees increasing by approximately 53 $41,000. The additional program fees will offset higher parks and recreation - related employee and 54 other operating costs. As noted above, the City also expects to receive $225,000 in local government 55 aid which will be earmarked for capital replacements. 56 57 The Recommended Budget also relies on approximately $317,000 of General Fund cash reserves which 58 is less than the $430,000 figure referenced earlier in the budget process. The decline is somewhat due 59 to refined estimates of personnel- related costs that factors in recent employee turnover. It also includes 6o revised estimates of the amount of savings being derived from the newly- imposed sales tax exemption U i and the extent it will offset inflationary effects on general operating costs. 62 63 Page 2 of 4