6.0. SR 11-10-2003 - Laserfiche WebLink

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Budget StaffReport November I0, 2003 Page 2 of 6 2004 LE.vY On September 8, 2003 the City Council approved the 2004 proposed maximum levy. The State Legislature imposed levy limits upon municipalities in 2004 but also allowed cities to recapture 60 percent of the 2004 LGA cuts. The city LGA cut in 2004 is $644,138. (Over two years, in 2003 and 2004, the state reduced the city LGA by almost $1.3 million from what the city expected to receive.) In the General Fund the tax revenue is up $539,450. This is almost the exact amount as the 60 percent of the LGA reduction plus the $150,000 street levy. Previously, the street levy was not in the General Fund but was within the limited levy. Now because of the city CIP and a recent change in the state law, our street levy for the pavement rehabilitation program can be outside the levy limit. This street levy amount is $100,000 for 2004. The shifting of this street levy frees up additional monies for General Fund activities. Sherburne County has estimated that the city will realize a 12 percent increase in its Net Tax Capacity for 2004. Based on this information and the proposed maximum levy, the city tax rate should go down about 2 percent from 44.614 in 2003 to 43.731 in 2004. The 2004 proposed General Fund revenues are $7,619,550. This is $68,350 less than the originally adopted 2003 budget. When including the LGA cut in revenues in 2003, then the 2004 revenue projection is an increase of 8 percent or $568,250. Almost all of this increase in the General Fund budget is in the tax revenue line item. 2004 EXPE..NDITUI:~E.$ The 2004 General Fund expenditures are proposed in the amount of $7,764,950. This is a $516,100 or 7.1 percent increase over the amended 2003 budget. (This is $77,050 more than the original 2003 budget.) The gap between the requested expenditures and the proposed revenues is $145,400. This budget gap is expected to increase before adjustments are made to balance the 2004 budget. The most significant decision before the City Council that would increase the budget gap is the possible hiring of a Park and Recreation Director sometime in 2004. This cost is estimated to be $44,900 for a mid-year hiring including some furniture and miscellaneous expenses. The other budget adjustments are for insurance ($8,000), animal control ($4,000), seniors part time employee ($1,200), and a reallocation of time spent by the Environmental Assistant ($22,000). P/ease note that these figures are estimates and the fina/ figures m~ va{7 slightS. These changes, puts the 2004 budget at $7,845,050 and the budget gap at $225,500. The 2004 expenditures include a three percent cost of living increase for employees, normal step increases, and four positions that were not in the amended 2003 budget. Two of these positions are new and two of these positions are filling current vacancies. The 2004 budget also includes additional operating expenses for the new Public Safety facility and the expanded City Hall facility. Personnel and these operating expenses are two of the bigger increases in the 2004 budget. S: ~Council~Pat~Budgct~ 1103balancing.doc