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<br /> <br />Item 6.7b. <br /> <br />MEMORANDUM <br /> <br />TO: Mayor and City Council <br /> <br />FROM: Pat Klaers, City Administrator <br /> <br />DATE: November IS, 2004 <br /> <br />SUBJECT: 2005 General Fund Budget <br /> <br />In the August and September budget meetings, discussion centered on requested city staff <br />additions and the anticipated increase in the city Net Tax Capacity (NTC). It became clear as <br />the discussions progressed that the City Council desired no change in the city tax rate in <br />2005 as compared to 2004. <br /> <br />The last estimate from the county indicated that the city NTC will increase 16.1 % and this <br />will generate a significant amount of additional tax revenues without a tax rate change. This <br />additional tax revenue combined with an increase in the growth related revenues (based on <br />the volume of building permits, plan check fees, etc.) and additional Local Government Aid <br />(LGA) resulted in a draft budget that the City Council accepted in the amount of $9,281,900. <br />This is a $1,406,550 or 17.86% increase from the adopted 2004 general fund budget. <br /> <br />The additional revenues in 2005 allows the City Council to add a number of staff positions <br />that had been cut or delayed because of the 2003 LGA cuts and also allows the Council to <br />add some staff to various departments in order to keep pace with growth and development <br />issues and citizen demands for additional services. Overall the plan in 2005 is to fill seven <br />full time and two part time positions. All but one of these positions are in the budget for 12 <br />months; the exception being the community development director, which is scheduled to <br />start in July. <br /> <br />Since the September 7, 2004 budget worksession there have been a number of staff <br />discussions regarding some changes in the 2005 draft budget. There is only one minor non- <br />tax change to the budget revenues; but some adjustments within expenditure categories are <br />being evaluated. On the expenditure side of the issue is the fact the police union settled for <br />more than the 3% that was within the draft budget. The extra 2% for the police union <br />amounts to approximately $27,000. Another expenditure issue is the conference/schools line <br />item in the Planning Department as the director of planning has started work towards her <br />master's degree. City policy calls for a maximum of $3,OOO/year to be provided for tuition <br /> <br />s: \ Council\Pat\Budget\2005\ GeneralFundl11S.doc <br />