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Regular City Council Meeting Monday,July 11,2011 Page 17 suiting in the proposed budget presentation tonight. City Manager Malinen ad- vised that this budget achieves the direction of the City Council; however, he noted that it would significantly change existing program and service levels. City Manager Malinen advised that the 2012 budget objectives, as part of the bi- ennial budget for 2012/2013, addressed long-term funding needs, while preserv- ing flexibility to respond to changing conditions during that period; with an em- phasis on priority-based budgeting and strengthening funding for capital replace- ments. City Manager Malinen summarized various impacts, including reductions in the tax-supported operating budget; zero percent COLA; 5% increase in city-share healthcare costs; wage step increases for eligible employees; and non-personnel costs frozen at 2011 levels; resulting in the operating budget being reduced by $715,000. Service level reductions and impacts for tax-supported programs in- cludes reduced police community relations and lake patrol; reduced street and pathway maintenance; elimination of the leaf pick-up program; and reductions in recreation programs and community information services. City Manager Malinen advised that this reduction would result in an approximate savings of $2 per month for an average household for tax-supported items, with the median valued home paying approximately $56/month. City Manager Malinen advised that the anticipated 2013 budget impact items would provide a 1% employee COLA; wage step increases for eligible em- ployees; 5% increase in city-share healthcare costs; and non-personnel costs in- creasing by approximately 2%. City Manager Malinen advised that the 2013 budget would decrease to $18,594,333. Historical comparisons for the city and metro-area cities with populations be- tween 25,000 and 45,000 was provided based on a $235,000 valued home; in ad- dition to 1995-2010 local rate comparisons. City Manager Malinen advised that there was a collective increase in non-tax- supported programs with an operating budget increased by $1,692,679, covering MSA/street reconstruction projects; utility infrastructure costs; and anticipated in- creases in water purchases and wastewater treatment. City Manager Malinen ad- vised that the 2013 total budget for non-tax supported programs included in- creased user fees for water/sewer customers, and golf course customers, representing an approximately $13 increase for a typical residential customer, or a total of$58 per month. City Manager Malinen advised that he would be working with Finance Director Chris Miller in the next few weeks to further refine and ensure the accuracy of the program allocations. Mr. Malinen noted the need for further assessment and re- finement of funding allocations for specific programs, new contractual obligations