6.0. SR 09-07-2004 - Laserfiche WebLink

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September 7, 2004 Budget Memo ])age 2 of 4 the department heads have "stepped up" and made some adjustments in the 2005 requests that they made earlier this summer. Attached is a sheet showing the type of adjustments that will be made to the 2005 expenditure proposal. Again, the numbers are not yet final but the list should give the City Council an idea of how the cuts are going to be made. The other good news is that the city NTC is projected to increase 16.1%. This information was just received from the County. As discussed on August 23, 2004, this type of increase allows all the city departments to "catch up" somewhat in their supplies and other services/charges categories and allows most departments to "catch up" somewhat in the personal services area. (The "catch up" is related to the 2003 cuts in Local Government Aid.) At the August 23, 2004 meeting, the proposed 2005 general fund budget included an increase of $500,000 in tax revenues. This was based on a 10% increase in NTC. If all or most of the additional tax revenues as generated by a 16.1% increase in NTC versus a 10% increase in NTC goes into the general fund, then we will be experiencing one of the largest increases in our budget in recent memory and we could be adding the largest number of employees in one year in recent memory. Even with this type of increase, the City Council may see additional requests for employees, supplies, and equipment items again in 2006 based on additional demands for services due to our growth. Please see the preliminary levy sample page as prepared by the Finance Department dated August 31, 2004. This is the same preliminary levy sample that the City Council saw on August 23, 2004 xvith the exception that the county, estimated NTC section is now included and the EDA and HRA county estimated figures are revised. The additional tax revenues generated and available with no city tax rate increase is $402,807. This is the difference between the amount generated at a 10% NTC increase as discussed on August 23 and what is generated at a 16.1% NTC increase. Assuming the City Council wants to use all of the tax levy that is available without a city tax rate increase, then the total city tax levy would be $7,623,985. This amount is shown in the draft resolution that is attached. It should be noted that the split between the general fund and the equipment and street levies has been altered slightly as has the PERA amount. On August 23, 2004, the estimate when we were dealing with a 10% NTC increase was that $500,000 going to the general fund and $201,117 going for streets and equipment. The attached resolution shows $236,000 going for streets and equipment and $867,924 going to the general fund. As you may recall from the personal services list that was discussed on August 23, 2004, this additional general fund amount of $367,924 almost matches the amount needed for the 7 full-time employees (with one starting at mid- year) and the 2 part-time employees that I recommended the City Council consider. Please see the attached revenues ~vorksheets as prepared by the Finance Department. Under the scenario where the additional tax revenue is split per the above paragraph, then the general fund tax amount will be $5,997,800. This is a $869,545 increase from the 2004 adopted budget (this does not exactly match the above amount of $867,924 due to the PERA estimate that was used). The tax increase in the general fund is 17%. The total general fund revenues are now projected in the amount of $9,281,945. This $9,281,945 is a $369,545 increase over the revenue figure discussed at the August 23, 2004 meeting. The total increase in the proposed 2005 general fund revenues as compared to the 2004 adopted budget is $1,406,545 or 17.86%.