8.0. SR 11-25-1996 - Laserfiche WebLink

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Budget Worksession Memo November 25, 1996 Page 2 1997 BUDGET GAP At the last budget worksession on September 9, the City Council reviewed the 1997 budget gap of $75,400. This gap between requested expenditures and available revenues is fairly typical and, in fact, we are often wrestling with a larger budget gap. In order to remind everyone as to how we got to this point, attached for your review are the September revenues summary and detail pages, the September expenditures summary and detail pages, the September 9, 1996, Council minutes, and my memo dated 9/4/96 to the City Council for the September 9 meeting. At the 11/25 worksession I will be recommending to the City Council that $89,000 in adjustments from Page 2 and 3 of my memo be made. This is $13,600 more than the budget gap and I am then recommending that this amount be added to the City Council Contingency Fund. As noted in my 9/4/96 memo, the City Council Contingency Fund needs some additional monies in order to provide adequate flexibility for the City Council for unexpected 1997 expenditures. Staff will be prepared to review the recommended budget changes and the rationale behind adding these funds to the contingency on Monday. I am not sure if all of the $89,000 in adjustments will be approved by the City Council, or if the difference between the adjustments and the current budget gap will be added to the City Council Contingency Fund, or if the City Council will want to further reduce the budget in order to lessen the tax levy increase; but I do know that the City Council Contingency Fund is very tight. The Contingency Fund includes funds for the personnel wage cost of living adjustments (COLA) and funds for all additional new employees. All new employees are subject to further Council approval in 1997. The City Council Contingency budget as discussed in September, is proposed in the amount of $193,500. This is the same amount as what was included in the adopted 1996 budget. The COLA adjustments for the General Fund non union employees is estimated to be in the $46,000 range if a 3 percent adjustment is approved by the City Council. Additionally, it is estimated that approximately $120,000 will be spent on new employees. A rough list of the desired positions for 1997 are outlined on Page 2 of my 9/4/96 memo. This amount could be less if some of the proposed additions or changes are not authorized until some time after the first part of the year. Nonetheless, we can expect at least $100,000 to be spent on additional employment services in 1997 and when this amount is combined with the COLA amount, the balance in the City Council Contingency Fund for true contingency expenditures becomes very small and is somewhere in the range of I percent of the budget. This is not very much flexibility for the City Council and is the basis for my desire to add more monies to the 1997 City Council Contingency Fund.