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1�"� � <br />� � <br />� <br />; . �. <br />To: Bil1 Malinen, City Manag�r <br />From: Chris Miller, F'inance Director <br />Date: January 28, 2009 <br />Re: 2009 �uciget Red��ctioils Related to the Loss of MVHC <br />C <br />You recently asked the Department Heads to identify potetltial budget cuts in recognition that the <br />City is likely to lose approximately $400,�00 annuall� in generaI-purpose state aid; also known <br />as Market Value Homestead Credit reimbursement or MVHC. Based on a formula that <br />distributes the impact of the loss of MVHC �n a proportionate basis of each division's operation <br />budget, the Finance Deparfinent would 11ave to accomrrrodate the foilowin� budget reductions to <br />the 2009 Budget: <br />❖ �'inance/Accounting - $16,261 <br />:• Central Services - $2,254 <br />. Tnslirance - $2;�57 <br />Based on a cui•sory review, it is �ropased Chat the recluctions would come from: <br />❖ Reduced calor pri�ting ar�d copying for City dacuments <br />❖ Use o� Insurance Fund reserves <br />❖ A 0:25 F'T� reduction in tl�e FinancelAccounting area <br />The proposed budget reductions and subsequent impacts are discussed in gr�ater detail below. <br />Central Services Division <br />The Centrai Services division reductian of $2,254 can be accornmodated by a reduction in the <br />a�nount of printing costs — specifically, a 50% reductian in the ai�zount of colar copies thai are <br />typically made over t�ie course of the year. rhe savings wouid come from redi�ced color toner <br />purchas�s and maintenanee charges which are tied directly to t�e nuanber of copies made. Calor <br />toner and copies cast S times as much as black and whit� copies do. <br />This rn�ould likely have the greatest impacf oti publications prodiiced by ihe Parks & l�ecr�ation <br />Departinent, but would also have san�e impact on other departments as well. <br />Insurance I�ivision <br />The Insurance Services division reduction o� $2,357 can be accommodated by a reduGtion in the <br />General �'unc�'s share of the City's propertylliability coverage. Bu� becalise tlle City's insurance <br />premiums �re fixed for 2009, this will require the use of reserves held ii� the City's Insurai�ce <br />�'und to ��'fset this reduction. � <br />