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2014 Operating Budget $ 24,723,285 2015 Budget Reductions Supplies, materials, contractual services(57,080)$ Contribution to Fire Relief Association(11,000) Debt Service(220,000) Total Budget Reductions(288,080)$ 2015 Budget Additions Supplies, materials, contractual services251,430$ Employee cost-of-living-adjustment203,135 Employee wage step increases168,000 Employee position changes/reorg.174,000 PERA pension increases100,000 Capital replacements723,570 Total Budget Additions1,$ 620,135 Net Budget Change $ 1,332,055 2015 Operating Budget $ 26,055,340 % Increase5.4% 34 35 Again, the operating budget (including capital replacements) is scheduled to increase by 5.4% in 2015. 36 If we exclude capital replacements, the increase is only 2.5%. It should be noted that capital 37 replacement expenditures can fluctuate widely from year-to-year. They are depicted above because 38 they will require a formal budget appropriation from the Council. 39 40 As noted above, the 2015 Operating Budget for the tax-supported programs relies on $175,500 in cash 41 reserves to achieve a balanced budget. The use of cash reserves will be higher if the Council eliminates 42 the 2015 tax levy designated amount set aside for reducing deficit spending. 43 44 Final Comments 45 City Staff recently reviewed the 2015 Proposed Budget and it appears that there could be up to $10,000 46 in potential funding reductions for motor fuel expense depending on final contract pricing provided by 47 the State. It does not appear at this time that there is any other potential savings of this magnitude. 48 49 In addition, Staff will note that due to employee turnover there appears to be operational savings of 50 approximately $200,000 in the 2014 General Fund budget. Any operational savings are retained in the 51 General Fund and are available for future use. 52 53 These excess monies could be earmarked for tax relief in 2015. However, the Council may want to 54 consider other potential uses such as funding for capital replacements, one-time initiatives, etc. 55 56 Finally, the Council is reminded that during the budget hearing on December 1, representatives from 57 the Human Rights Commission came forward requesting an additional appropriation of $2,000 in the 58 2015 City Budget to conduct a civility forum in the community. 59 60 Staff has reviewed the proposal and feels the forum would be a worthwhile endeavor to engage 61 citizens. If the City Council would like to fund this request, the City Manager recommends the funds 62 come from the Communications Fund. 63 64 Page 3 of 9