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<br />Wages and Benefits <br />Similar to last year, we are proposing a 3% increase for non-union employees to keep our compensation <br />consistent with our peer cities. The bargaining union contracts (Patrol, Sergeants, and 49ers) have <br />approved a 2.75% increase with a market adjustment to peer average COLA increase for 2020. <br /> <br />Health insurance is typically budgeted at a 5% increase. This number can be adjusted following our <br />annual renewal in August and after open enrollment when we know which plans are chosen. <br /> <br />The employer contribution to the Police & Fire PERA is increasing 0.75%, from 16.95% to 17.7% in <br />2020. Workers’ compensation premium rates are expected to increase an overall average of 3%; however, <br />some job classes will see significant increases, such as police with a 14% rate change. <br /> <br />State Aid <br />The LGA is budgeted in the Equipment Replacement Fund which makes it easier to adjust and <br />reprioritize equipment needs versus immediate General Fund operational changes should LGA be <br />eliminated or reduced. Depending upon the tax bill to be approved by the state, LGA could range from <br />$334,000 - $421,000. <br /> <br />Transfers In <br />Transfers are made each year to the General Fund from the Waste Water, Liquor, Storm Water, Garbage, <br />EDA and HRA funds to cover costs associated with providing internal services to those funds. We will <br />review the transfers to ensure they cover services used. The exception is the Liquor Fund transfer, which <br />is significantly higher to offset other operating expenditures. The transfer from ERMU is allocated <br />primarily to the General Fund and any excess to the Equipment Replacement Fund. <br /> <br />Other Information <br /> Most revenue items are consistent with last year and we continue to monitor building activity and <br />revenue updates. <br /> The state fuel contract will again be used for 2020 – fuel price will start at $2.75 per gallon. <br /> The tax abatement levy will decrease about $21,000 due to the completion of a tax abatement <br />agreement in 2019. <br /> Additional debt service from the public safety building bonds will be added on to the tax levy. <br /> <br />Council Consideration <br /> Preliminary budget will be drafted based on the same level of service as in 2019. Does the Council <br />desire service level increases/decreases? Where? <br /> To meet the Council goals, does the Council wish to increase the general levy for park <br />improvements, vehicle replacement and/or building improvements? <br /> The city administrator has attempted to decrease the tax rate each year utilizing new growth. Is this <br />important? <br /> <br />Financial Impact <br />N/A <br /> <br />Attachments <br /> None <br /> <br /> <br />N:\\Public Bodies\\Agenda Packets\\05-06-2019\\x10.7 sr 2020 Budget Discussion.docx <br />