5.3. SR 11-08-2010 - Laserfiche WebLink

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Item # 5.3. .M ,r.a ~~~ ~~~ MEMORANDUM TO: Mayor and City Council FROM: Lori Johnson, City Administrator DATE: November 8, 2010 SUBJECT: Budget On December 6 public input will be taken on the budget and tax levy following a presentation to the public. The Council reviewed the budget last in September prior to approving the preliminary tax levy. The budget was not balanced at that time as several items needed further discussion. In order to prepare for the December 6 meeting, the outstanding items should be resolved to present a balanced budget. Also, two of the enterprise budgets will be presented at this meeting as outlined in Finance Director Tim Simon's attached memo. As you may recall, there were several decisions made by the Council that have a major impact on the budget such as not including Local Government Aid (LGA) in the budget because of the uncertainty of actually getting the aid from the State. Additionally, the proposed budget includes the use of $325,000 of fund balance. That amount could be increased slightly to balance the budget with the understanding that the fund balance is in place to meet cash flow needs until tax revenue is received in late June. Attached is a summary of the budget as it currently stands along with several proposed changes. Including the proposed staff adjustments, the budget deficit increased from $196,400 to $205,000. Detail on the adjustments is included in the attachment. As we have discussed previously, one way to eliminate the deficit is to delay as many of the capital outlay purchases as possible until LGA is received. The $686,800 of LGA will eliminate the deficit in full if it is all received. The second attachment is a list of capital outlay currently included in the General Fund. Of the $322,650 requested, $188,900 could be delayed until LGA is received. This leaves a shortfall of $16,100. This could be funded through additional use of available fund balance. In conclusion, I am requesting direction from the Council on whether you agree with the concept of delaying capital outlay and using fund balance as stated above to present a balanced budget on December 6. Additionally, there are two minor items, council N:\Public Bodies\City Council\Loxi\2010\Budget Memo 11 8 10 2'.docx