2.0. SR 08-23-2004 - Laserfiche WebLink

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~ugust 23, 2004 Page 4 of 5 B,dget Memo total for these positions is about $400,000. At this point, it is uncertain how many of these positions can be added in 2005. CLOSING THE BUDGET GAP When some staffing is added to the 2005 budget, the budget gap will increase. It is difficult to determine how many positions can be added at this time. A key factor in the City Council's decision will likely be the city's increase in net tax capacity. In the current draft we are using a 10% NTC increase. The NTC increase by 12% in 2004 and by 14.4% in 2003. If the NTC increase is less than 10% in 2005, then we have some serious budget challenges. If the NTC increase is 12% in 2005 and there is no tax rate change, then an extra $131,292 would be available. ~ If the NTC increase is 14% in 2005 and there is no tax rate change, then an additional $262,589 would be available. If the NTC increase by 14% in 2005 and there was a 2% increase in the city tax rate, then an additional $412,332 would be available. As you can see, the balance between the NTC increase and the city tax rate change is an important issue in setting our expenditure priorities for 2005. As always, there are some options available to the city in order to close the budget gap. The options include: ~ add additional tax revenues (there are no levy limits for 2005) shift some tax revenue for equipment and streets into the general fund use reserves for some of the wage increase that was recently authorized increase growth related revenues ~ use additional reserves from the liquor store and utilities ~ use some host fee reserves fund requested expenditures such as the painting of the f~re hall ($20,000) this year move some capital outlay items to equipment reserves ~ reduce the Council contingency reduce some supplies and other services/charges requests ~ start some positions later in the year delete some positions from consideration At the August 23, 2004 worksession, we should review options to close the budget gap and concentrate on our tax levy and tax rate situation. We may have to base our preliminary decisions on some assumptions regarding the increase in NTC or we may chose to delay any detailed discussion until this NTC information is available from the county. The city needs to certify its proposed maximum levy to the county by September 15, 2004. We can have a follow-up Council worksession on the budget on September 7 and/or September 13, 2004.