5.0. SR 08-07-2000 - Laserfiche WebLink

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2000 Budget August 1, 2000 Page 9 balance in the equipment reserve at the beginning of 2000 was approximately $185,000. Ice Arena...Last year, without capital outlay expenditures being taken into consideration, the ice arena operating budget came in at about a negative $27,000. The arena actually made money from an operating point of view, but the annual building debt is almost $200,000 a year. This makes a positive cash flow almost impossible. The projection for 2001 is slightly worse than the projection for 2000, but at this point it is simply an educated guess. We do know that personal services are increasing, but we don't know if the non hockey revenues will increase, or if 1999 was just an unusual year. The city will have to find an ongoing source of funds for ice arena capital expenditures and to meet its operating losses. At the end of the year staff will be proposing that we use General Fund excess revenues to help finance the ice arena operation and to eliminate any year end debt that may exist. This is similar to the city supporting other recreation activities. THE GAP AND TAX LEVY As previously noted, expenditures are requested to go up 12 percent and revenues are projected to go up 4 percent. Accordingly, there is a significant budget gap at this time in the budget development. The budget gap is $468,900 and to be truthful, there are no easy solutions to this problem. Clearly, we cannot make too many decisions until we know what the estimated growth in the city NTC is for next year and this information will not be available from the county until mid to late August. There are no levy limits on cities for 2001, but nonetheless, I think we always have a self- imposed levy limit on what is appropriate for tax rate changes. The budget estimate includes no tax rate change and a 5 percent NTC growth. Offered for your review is a worksheet from the finance department showing how much additional tax revenue could be generated with a 7 percent NTC change and either no tax rate change (+$79,904) or with a 3 percent city tax rate change (+208,089). The information is also offered at 8 and 9 percent growth rates. Other options for closing the gap include moving some capital outlay items to equipment certificates, but this impact is somewhat lessened by the fact that equipment certificates are also a tax levy. Also, we can consider purchasing some capital outlay items this year as it is expected growth related revenues will exceed the budgeted amount so there will be some 2000 funds available. We could also consider use of additional equipment reserves for some activities. One item that comes to mind that could be funded this year is the fire department building improvements in the amount of $25,000.