2.0. SR 12-02-2002 - Laserfiche WebLink

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December 2, 2002 Page 2 of 3 o~vners that have not had the benefit of the worksessions over the last four months; and therefore, are not familiar with all of the revenues, projects, programs, functions, services, etc. of the city. The state legislature has imposed levy limits on municipalities and this is one of the reasons why the city budget is seeing its smallest percentage increase in over ten years. The 2003 budget is proposed to increase 6.5 percent over the adopted 2002 budget. While this increase far exceeds inflation rates, it is still smaller than requested by department heads. The city general fund budget is proposed in the amount of $7,687,900 for 2003. This is a $472,400 or 6.5 percent increase over the adopted 2002 budget. Just over 59 percent of the general fund revenues come from taxes. The largest expenditure category in the general fund budget is personnel services. About 74 percent of the total general fund expenditures for the city are for employees and employee related benefits. The most remarkable thing about the 2003 budget is how unremarkable it is. For example, there is only one capital outlay item (for under $40,000) in the general fund budget in 2003. Also, there are only a few part time and seasonal employee additions in the 2003 budget. Most of the increase in the personnel services category is due to the typical wage increase for cost of living purposes, employee step increases in the wage plan, and due to the new employees (or added hours for part dme employees) that were approved in 2002, which were not in the adopted budget and now need to be included. The increases in the supplies and the other services/charges budget categories have been made to better reflect the history of actual expenditures. In the 2003 budget the city is still adjusting to the new city attorney program and the new city recreation program. Finally, as it relates to the 2003 budget, the building maintenance/custodial program is evolving as we look at contracting for some services and will continue to evolve for the next few years as the city completes its building expansion program. One of the concerns that the city had in putting together the 2003 budget relates to the possibility of reductions in local government aid (LGA) in 2003 after the budget has been approved. The state legislature can and may reduce promised 2003 LGA funds to municipalities in order to balance the state budget. This could cause anywhere from a minor to a very severe budget problem for the city. It is almost a certainty that LGA cuts ~vill be made for 2004 but this issue can be dealt with during the budget preparation and adoption process. Even if the state legislature does not reduce local government aids to municipalities in 2003 or 2004, cities will still feel the impact of the budget shortfall. For example, if state agencies are cut back due to a lack of funds, then either their work/responsibilities ~vill be passed on to municipalities or their work will not be done in a timely fashion. If the work is passed on to municipalities it means more pressure for more and new services without funding being available. On September 9, 2002, the City Council adopted a resolution establishing the proposed maximum 2003 tax levy for the city. This resolution is attached for your reference. The maximum 2003 levy is set at $5,980,161. S /Finance /Budget / truthntaxHearing