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REQUEST FOR COUNCIL ACTION Date: 1/26/2015 Item No.: 13.a Department Approval City Manager Approval Item Description: Receive a Summary Recap of the 2015 Adopted Tax Levy and Budget B ACKGROUND 1 During the 2015 budget process, the Council indicated a desire to receive a summary recap of the 2 formal actions taken on the tax levy and budget and to revisit the projected budget surplus from 2014. 3 A brief summary for each of these items is presented below. 4 5 Projected 2014 Budget Surplus 6 In early December, Staff projected a 2014 General Fund budget surplus of approximately $200,000. 7 The projected surplus was calculated by observing aggregate expenditures through November and 8 extrapolating that amount over the remainder of the year. At the time, it was noted that the City 9 typically incurs over $1 million dollars in expenditures during the months of December and January 10 that need to be recorded in 2014 before an accurate measure of the surplus can be determined. 11 12 Based on known expenditures through January 16th, it appears that the 2014 General Fund budget 13 surplus will be closer to $225,000. Again, this estimate could change over next month as final 14 payments and audit corrections for 2014 are recorded. The surplus was largely the result of less-than- 15 expected personnel costs due to staff turnover, which was somewhat offset by lower-than-expected tax 16 collections due to valuation appeals. 17 18 Employee positions that remain unfilled for a period of time create vacancy savings. Additional 19 savings are also realized when the City hires less-experienced staff that begin at the lower end of the 20 pay scale compared to the previous employee that held the position. 21 22 With this amount, the unrestricted General Fund cash reserve would be approximately $5,991,480, for a 23 reserve level of 43% compared to the 2015 General Fund Budget. The City’s Cash Reserve Policy calls 24 for reserve level of 35-45% of the Budget. The 2015 Budget projects a draw-down of these reserves in 25 the amount of $375,500. If this proves accurate, the cash reserve level would be at 40% by the end of 26 2015. 27 28 2015 Tax Levy 29 As adopted on December 8, 2014, the 2015 Tax Levy was $18,276,902, an increase of $273,181 or 30 1.5%. This was $382,148 lower than the amount presented at the truth-in-taxation hearing, and 31 $617,648 lower than the amount presented in the City Manager Recommended Budget. 32 33 34 Page 1 of 3