2.0. SR 08-22-2005 - Laserfiche WebLink

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Budget Worksession August 22, 2005 Page 4 of7 In addition to these "big four", we have a constant annual CIP amount for Information Technology of $45,000 and an occasional equipment item for the Ice Arena or a truck for the Building Department. Based on the attached material, you can tell that if a large purchase gets delayed and it is truly needed, then that purchase simply goes into a future year and makes the fmancial picture more difficult at a later date. A big part of the issue with vehicles/ equipment is dependability. We can always delay a purchase but we may pay the price in terms of providing services in a timely manner. It is appropriate that this vehicles/ equipment CIP conversation take place during the budget discussion as capital outlay items are getting to be a larger part of the annual budget; It is not unreasonable to think that 10% of the annual operating budget should go toward capital outlay. All the department heads present will give details and explain their requests and answer questions. At this time, I am hoping for approximately $650,000 of the budget gap to be solved within the capital outlay category. 2006 REVENUES In the draft 2006 budget the revenues are proposed in the amount of $10,033,200. This is a $749,100 or 8% increase over the adopted 2005 budget As noted during the August 8 worksession, the 2006 revenues are flat. The only exception to this statement is tax revenues and this is due to the increase in the net tax capacity. The budget plan is to have a zero city tax rate change and all available tax revenues that are generated and that are not required for established programs or debt payments go into the general fund. If the NTC increase is 14% and not 10%, then the City Council can add approximately $305,000 to the tax revenues to solve the budget gap. In addition to the above tax revenue change for 2006 that I hope the city realizes, I would also like to add to the general fund tax revenues the $85,450 that is listed in the levy sample for payment on the fire pumper. This dollar amount should be placed into the general fund tax revenues line item and the city will make this fire pumper payment by way of using equipment reserves; like it did in 2005. When the pumper was ordered, the Council expressed their desire to fund this item with reserves. Staff will be prepared to review the 2006 draft revenues at the worksession. In order to partially address the revised budget gap of approximatelY $114,800, we will need to increase some revenues that have previously been projected at a conservative level and which now look like they can be increased based on the trends that we are seeing. This includes increasing the plumbing/heating permits to the 2005 budget level (a $38,800 adjustment), increasing parking fme revenues by $2,000, and increasing the court fines by $5,000. These changes further reduce the budget gap to approximatelY $69,000. 2006 ExPENDITURES In the draft 2006 budget, expenditures are proposed in the amount of $11,189,250. This is a $1,905,150 or 20.5% increase over the adopted 2005 budget. However, as noted earlier in this memo, the elimination of a significant amount of capital outlay from the general fund budget will reduce this expenditure increase. Simply adding the residential growth in the city and inflation together would mean that it is reasonable to expect that the budget would