2.0. SR 08-23-2004 - Laserfiche WebLink

Home Browse Search

~l,gus! 23, 2004 Page 2 of 5 Budget Memo One final note on the 2004 budget is that with what we have already approved for unbudgeted expenditures in 2004, our flexibility in incurring additional expenses is becoming limited. 2005 REVENUES On August 9, I indicated to the City Council that revenues would be going up in the neighborhood of $1.1 million based on increases in three major areas and not too many other changes of significance being made. The three major changes are in taxes, Local Government Aid (LGA), and growth related revenues. As a reminder, when I refer to gro~vth related revenues I am talking about building permits, plumbing/heating permits, and plan check fees. The estimated increase of $1.1 million is still reasonably close. As you know, LGA is going up $393,650 in 2005. Also, the growth related revenues are being projected at 75% of the actual amount received in 2003. This means an increase of $226,400 or 25.5% in 2005 from the budgeted amount in 2004. The area of greatest flexibility for the City Council is in the taxes amount that is dedicated to the general fund, especially since there are no levy limits for 2005. For discussion purposes, the draft budget shows a $500,000 increase in taxes for general fund activities. Please see the attached preliminary levy sample as provided by the Finance Department. The current city tax rate is 43.78%. This preliminary levy sample shows that with a NTC increase of 10% and no tax rate change at the city level, then $701,117 of additional taxes can be generated. (This is the combined total of the new levy amount of $582,402 near the top of the net levy list and the "variance from the proposed tax levy" amount of $118,715 under the 10% NTC increase section.) Of the total, I have put $500,000 of additional taxes in the general fund and the other $201,117 is proposed for streets and 2005 equipment certificates. The actual amounts for each of these three categories still needs to be determined and NTC information is needed in order to make a decision about where our tax level and tax rate should be for next year. It is anticipated that the NTC information ~vill be available from the county around the end of August. Please see the attached budget revenue worksheets which show the actual revenues received from the past five years and the August 23 revenue worksheet detail pages on the 2005 proposal. Total revenues at this time are proposed in the amount of $8,912,400. This is a $1,037,000 or 13.2% increase over the adopted 2004 budget. It should be noted that the 2004 budget included the use of $117,000 from the fund balance and that no such use of the fund balance is in the 2005 proposal In early 2004, the City Council approved a resolution which allocated some of the 2003 general fund year and balance for capital equipment and pay adjustments. Some of this allocation may need to be put into the 2005 budget so that the wage adjustments that were recendy given by the City Council can be absorbed over a two-year period. 2005 EXPENDITURES Please refer to the expenditure summary sheets by categories for an overview of the changes within each department and to the August 23 budget worksheets for more details on some of these requested changes. In looking at the supplies, other services/charges, and the capital outlay/transfer categories combined, the requested increase is 24.3% or $480,150. (This is close to the $500,000 increase used as an estimate at the August 9 Council worksession.) We need to look at some of these requested increases in detail as we may not be able to afford everything that is being proposed. In the end, the