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❖ An additional $1 million in levy dollars = 7.6% levy increase. It's also the equivalent of 15-20 FTE's. **Note**; any budget reductions intended to alleviate this increase must come from property-tax supported programs. ❖ Assuming the City's t� base remains unchanged, a levy increase of $1 million will increase the t�es on an average-valued home by $3.61 per month. ❖ Long term; to maintain current service levels and replace all existing infrastructure at the optimal time: a) Property t�es will need to increase by 17% annually over the next 10 years. b) Water & Sewer rates will need to increase 10% per year. These financial challenges not only were identified several years ago, but they have grown steadily worse. Our previous budgeting processes have done little, if any, to address them. As a result, Staff is recommending significant changes to the process. Specifically, Staff recommends the following: Recommendation #1: Conduct a study through an independent consultant to develop a matrix that would depict the following: a) The true cost of providing each property t�-supported program b) An identification of the current level of service c) Estimated number of beneficiaries of each service Recommendation #2: Conduct 3 or 4 town hall-type meetings to solicit input on the 2010 Sudget With regard to the program cost study, the matrix will assist the Council in making budgetary decisions by equating the selection of service levels with costs and citizen benefits. With regard to the town hall meetings, Staff is suggestion that the City consider using a new tool that is designed to collect individual preferences and compile them in such a way that reflects the community's priorities. This process can be characterized as an electronic version of the `Dot Method', whereby individuals can signal their preferences, and the results can be summarized and displayed for subsequent review and discussion. The advantage of this new method over the `Dot Method' is that all responses are anonymous, which arguably results in more truthful data especially in larger groups. The summarization process can also be done in real time. While City Staff did seek initial cost proposals from multiple consultants, we have refined our discussions with Springsted Incorporated, which has served as a financial consultant to the City on a variety of matters including, bond issuance, Twin Lakes financial modeling, and bond rating analyses. Springsted proposes to assist the City in this alternative budgeting process for approximately $30,000. POLICY OBJECTIVE Establishing a budget process that aligns resources with desired outcomes is consistent with governmental best practices, provides greater transparency of program costs, and ensures that budget dollars are allocated in the manner that creates the greatest value. FINANCIAL IMPACTS The costs associated with a program cost assessment can be accomodated with the 2009 Adopted Sudget Page 2 of 3