3.5. SR 11-22-2004 - Laserfiche WebLink

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The expenditures in 2005 closely follow the adopted 2004 budget. There are only minor increases being proposed in the operating expenses. The one expenditure change to note is that the debt has been paid off on the 1994 project. Surface Water ManaR"ement (SWMI Surface water management revenues come from the tax levy and from development fees. Since development fees are unpredictable, they are excluded as a revenue in the budget. SWM expenses include restoration and repair of county ditches, trunk storm sewer improvements, and storm sewer expenses associated with the pavement rehabilitation program. If the revenues exceed expenditures, then the balance is placed into the SWM reserve for future projects. City Special Assessments Revenue for city special assessments is identified in the tax levy resolution. There is a slight decrease in the special assessment amount that is due in 2005 as compared to 2004. Unless additional special assessments are assumed next year, then special assessments should go down in 2006 by approximately $7,700. This decrease is expected because 2005 is the last year for payment on the Lake Orono dredging project. Ice Arena In August the Ice Arena Commission reviewed the proposed 2005 budget and indicated its support for the draft proposaL The proposed budget shows expenditures and revenues in the amount of $705,500. Tbe budget includes a general fund transfer amount of $64,100 and an equipment reserve expenditure of $8,000. As you can tell, the ice arena operating revenues do not generate enough funds to pay for the ice arena operating expenditures, debt on the new facility, and for capital outlay items. In this regard, general fund tax monies are used as a conrtibution to skating activities and to finance the operation of the ice arena. Equipment Certificates Equipment Reserves The expenditures for both equipment certificates and equipment reserves have previously been reviewed by the City Council. Tbe equipment certificate budget is $345,000. This translates into a tax levy of $86,000 in 2005, as the items purchased with the certificates are paid off over time. Regarding equipment reserves, the main revenue for this reserve is the cash contribution from the Municipal Utilities that does not go into the general fund. Of the utilities contribution to the city, $105,000, goes into the general fund and the balance goes into this reserve. Contributions from the utilities into this reserve will not match the $199,200 expense that is proposed, so some of the equipment reserve fund balance will be used. In the long term, the financing of equipment will be a significant capital improvement program challenge for the city. It is not difficult to see that over the next few years the requests for capital outlay expenditures will approach $1 million annually. A reasonable approach is to have approximately 40% of the capital outlay items included in the general fund; have 40% fmanced with equipment certificates; and use of equipment reserves for the remaiuing 20%. The key to this approach or formula will be to have the general fund finance s: \Council\Pat\Budget\200S \BudgetUpdate 112204.doc